Which one of the following statements is wrong about finance? Select one: O a. The financial industry helps firms raise capital from investors all over the world. O b. The financial industry may help promote innovation and spur economic growth. It is in everyone's best interest to leave the financial industry completely unregulated and free. O d. A financial market is a marketplace where investors can buy or sell financial assets such as stocks and bonds. O e. Richer countries tend to have more developed financial markets.

Which one of the following statements is wrong about finance? Select one: O a. The financial industry helps firms raise capital from investors all over the world. O b. The financial industry may help promote innovation and spur economic growth. It is in everyone's best interest to leave the financial industry completely unregulated and free. O d. A financial market is a marketplace where investors can buy or sell financial assets such as stocks and bonds. O e. Richer countries tend to have more developed financial markets.

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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What are the basic arguments for increasing capital requirements at large commercial banks? In what ways will depositors, stockholders, and society in general benefit? How might each group be disadvantaged? As commercial banks enter new lines of business such as brokerage, how much additional capital should be required? Should these new lines of business be insured by the FDIC? Why or why not? Give examples from today’s financial marketplace.
Suppose the population of Area Y is relatively young, and the population of Area O is relativelyold, but everything else about the two areas is the same.a. Would interest rates likely be the same or different in the two areas? Explain.b. Would a trend toward nationwide branching by banks and the development of nationwidediversified financial corporations affect your answer to part a? Explain.
a) One of the biggest problems for any economy is to figure out how to get or transfer money from people or firms who want to save (savers) to people or firms who want to borrow (investors). • Explain how financial markets can help to solve this problem efficiently. • Discuss how financial markets function and which tools they can offer to solve this problem. • Discuss how financial systems are of crucial significance to adequate capital formation, which is indispensable to a speedy economic growth and development. b) Analyze the relationship of financial development and economic growth/development. In other words, discuss how financial, especially capital, markets help economic growth and development.
a. “Financial intermediaries play a crucial role in an economic crisis–they are responsible for both causing the market to crash and then helping it recover from the crisis.” Is this statement true? Discuss with an example. b. Discuss the role of banks as financial institutions that fuel the economic growth of a nation.
Capital and the production of goods and services. In many developing nations, limited financial markets, instruments, and financial institutions, as well as poorly defined legal systems, may make it costlier to raise capital and may lower the retum on savings or investments. They also help to facilitate the intemational flow of funds between countries. Indian financial market consists of two major segments: (a) Money Market; and (b) Capital Market. While the money market deals in short-term credit, the capital market handles the medium term and long-term credit. Q7. (Case Study Problem) Financial sector plays a crucial role in the accumulation of The money market is a market for short-term funds, which deals in financial assets whose period of maturity is up to one year. It should be noted that money market does not deal in cash or money as such but simply provides a market for credit instruments such as bills of exchange, promissory notes, commercial paper, treasury bills, etc. These…
What are the reasons SMEs in Zambia face challenges with access to finance? Are these reasons different for large Zambian businesses? What kinds of financial products can help SMEs?
Does the present economic scenario offers ‘Restructuring Opportunities’? If yes, what the Investment Bankers should remain prepared for: a. List of digital companies b. List of distressed companies c. List of foreign funding firms d. List of cash rich companies MCQ
Minimum capital requirement is a popular tool for bank regulation around the world. Some commented argue for differential capital requirements with the size and the systemic importance of financial institutions as the key discriminating factor. What are the basic arguments for increasing capital requirements at large commercial banks? In what ways will depositors, stockholders, and society in general benefit? How might each group be disadvantaged? As commercial banks enter new lines of business such as brokerage, how much additional capital should be required? Should these new lines of business be insured under a depository insurance scheme? Why or why not? Give examples from today's financial marketplace.
4. Which of these is a form of monetary control? A. raising the overnight policy rate B. All the answers are correct C. Raising the travel allowance from $500 to $1000 for all locals travelling abroad D. Open Market Operation 5. A Venture Capitalist: A. Raises equity capital to invest in start-up firms B. Raises equity capital to restructure old firms C. Raises equity capital to acquire shares in other firms D. None of the answers are correct 6. The concepts of Economies of Scale is generally used among financial institutions to avoid the problems of: A. Lack of information B. Customer creditworthiness and net worth C. Information costs D. Bad debts 7. The central Bank must: A. Regulate financial institutions B. Regulate the economy C. Regulate flow of Imports and exports D. All the answers are correct 8. Which of these is the key indicator of equilibrium in the financial and capital markets? A. Price B. Interest Rate C. Savings D. Income 9. In 2004, Waqabaca discovered that the key…
discuss the rationale behind the introduction of negative interest rate policies across economies worldwide. discuss the effect of increasing the amount paid upfront when corporations make capital purchases focusing on benefits and drawbacks discuss the significance of including the factor of inflation in corporate finance calculation
A U.S. company has the following choices of financial markets in which to raise capital. Which one will it most often prefer? a.foreign bond b.domestic banks c.foreign bank d.a new issue of common stock
Which of the following statement is incorrect about the Peking Order Theory? A.Firms with high ratios of fixed assets tend to have higher debt ratio.The evidence exclusively supports the peking order theory B.When exernal finance is required,firms issue debt first and equity as a last resort C.Most profitable firms borrow less not because they have lower target debt but because they don't need external finance D.Firms prefer internal finance since funds can be raised without sending advers signals

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