4. Which is incorrect about financial securities?a. Financial securities are guarantees the holders in terms of their claims.b. Financial securities give stable financial return and safer environment to investors.c. Financial securities are utilized by firms to generate capitalization for firms or the government.d. Financial securities are regulated by the government to protect the investing public.e. All of the abovef. None of the above

Securities are financial instrument that are traded in the open market by investors. They are…

Answered: Which is incorrect about financial…

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter14: Corporation Accounting

Section: Chapter Questions

Problem 5MC: Which of the following is not one of the five primary responsibilities of the Securities and...

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Which statement is incorrect related to financial intermediaries (institutions)? * They are firms that specialize in financial intermediation - a process of borrowing funds from SSUs and lending such funds to the DSUs. The main objective of financial intermediaries is to convert savings from SSUs into investments. They are the biggest investors in equity securities in the PSE They offer the highest returns and lowest risks when compared to alternative investments available to SSUs. none of the above
Which statement is not correct? A. The main objective (role) of financial intermediaries is to convert savings of SSU’s into investments. B. Financial intermediaries purchase financial claims with a set of characteristics from DSU’s and sell financial claims with characteristics tailored to the desires of the SSU’s. C. Financial intermediaries normally absorb the risks from SSU’s and manage the risks by investing the funds received from SSU’s into various securities. D. Financial intermediaries serve solely as intermediaries with the financial markets and never serve as investors. E. none of the above
Which of the following statements is INCORRECT ? Large investment banks finance most of their activities by using retail consumer deposits as the primary source of funds. Failure to monitor the actions of firms in a timely and complete fashion after purchasing securities in the firms exposes investors to agency costs. As a delegated monitor, a financial institution's actions reduce agency costs. Financial institutions provide economies of scale in transaction costs
What is a financial market? What is the role of a financial market? 3-2 What would happen to the standard of living in the United States if people lost faith in our financial markets? Why? 3-3 How does a cost-efficient capital market help to reduce the prices of goods and services? 3-4 The SEC attempts to protect investors who are purchasing newly issued securities by requiring issuers to provide relevant financial information to prospective investors. The SEC does not provide an opinion about the real value of the securities. Hence, an unwise investor might pay too much for some stocks and consequently lose heavily. Do you think the SEC should, as a part of every new stock or bond offering, render an opinion to investors on the proper value of the securities being offered? Explain.
1)How does a profitable capital market help reduce the prices of goods and services? 2) The SEC attempts to protect investors who purchase newly issued securities by requiring issuers to provide relevant financial information to potential investors. The SEC does not provide an opinion on the actual value of the securities.Therefore, a reckless investor could pay too much for some shares and consequently lose a lot. Do you think the SEC should, as part of every new offering of stocks or bonds, give investors an opinion on the appropriate value of the securities being offered? Explain.
Which of the following statements is false? A. Internal controls are the processes by which the firm ensures that it presents accurate financial statements. B. Greenfield investments provide uncertain cash flows with high yields and high growth potential. C. Footnotes allow investors or any users to improve their assessments of the amount, timing, and uncertainty of the estimates reported in financial statements. D. Secondary markets are the markets in which existing, already outstanding securities are traded among investors.
The SEC attempts to protect investors who are purchasing newly issued securities by making sure that the information put out by a company and its investment banks is correct and is not misleading. However, the SEC does not providean opinion about the real value of the securities; hence, an investor might paytoo much for some new stock and consequently lose heavily. Do you think theSEC should, as a part of every new stock or bond offering, render an opinion toinvestors on the proper value of the securities being offered? Explain.
1) What would happen to the standard of living in the United States if people lost faith in our financial markets? Why? 2) How does a profitable capital market help reduce the prices of goods and services? 3) The SEC attempts to protect investors who purchase newly issued securities by requiring issuers to provide relevant financial information to potential investors. The SEC does not provide an opinion on the actual value of the securities.Therefore, a reckless investor could pay too much for some shares and consequently lose a lot. Do you think the SEC should, as part of each new offering of stocks or bonds, give investors an opinion on the appropriate value of the securities being offered? Explain
1- FinTech firms are facing increased regulatory oversight. A risk event at a FinTech firm can result in losses that are substantially more damaging than at traditional financial institutions. True False 2- Credit risk and interest rate risk cannot affect insolvency risk. True False
Which is false about long-term sources of a firm’s capital? a. Preferred shares are securities whose intrinsic value is based on prospective earnings b. Some types of bank loans may require collateral from potential debtors c. Retained earnings are internal sources of funding that can be utilized for expansion d. All types of corporations may issue equity securities to the public
Governments require some banks to conduct stress tests of their financial situation. What type of financial regulation is this requirement? A. Disclosure requirements B. Assessment of risk management C. Restrictions on competition D. Consumer protection
Which of the following statements is/are true?Statement 1: The PSE is a self-regulatory organization that provides and ensures a fair, efficient, transparent and orderly market for the buying and selling of securities.Statement 2: Because financial markets are perfect, securities buyers and sellers do not have full access to all possible informationStatement 3: The deputy governors of the Bangko Sentral Monetary Board may be reappointed more than once.

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