Ch01 - Investments: Background and Issues 1. Net worth...

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Investments: Background and Issues 1. Net worth represents _____ of the Liabilities and Net Worth of nonfinancial U.S. businesses. a. about 50% b. over 90% c. under 10% d. about 30% 2. _______ are the least organized markets. a. Brokered markets b. Dealer markets c.
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Direct search markets d. Auction markets 3. In 1999 eleven countries established a new currency called the ______ . a. Nafta b. Global c. Euro d. Zeppo 4. Net worth represents _____ of the Liabilities and Net Worth of Financial Institutions. a. about 50% b. over 90%
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c. under 10% d. about 30% 5. According to the Flow of Funds Accounts of the United States , the largest asset of U.S. households is ____. a. mutual fund shares b. real estate c. pension reserves d. corporate equity 6. According to the Flow of Funds Accounts of the United States , the largest liability of U.S. households is ____. a. mortgages
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b. consumer credit c. bank loans d. gambling debts 7. ____ is not a derivative security. a. A share of common stock b. A call option c. A futures contract d. all of the above are derivative securities. 8. According to the Flow of Funds Accounts of the United States , the largest financial asset of U. S. households is _____.
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a. mutual fund shares b. corporate equity c. pension reserves d. personal trusts 9. According to the efficient market hypothesis, there should be __________ overpriced and __________ underpriced securities. a. no, no b. no, some c. some, no d. some, some
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10. The material wealth of society is determined by the economy's __________, which is a function of the economy's __________. a. investment bankers, financial assets b. investment bankers, real assets c. productive capacity, financial assets d. productive capacity, real assets 11. In financial markets, corporations are net __________ and household are net __________. a. borrowers, borrowers b. borrowers, savers c. savers, borrowers
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d. savers, savers 12. __________ assets generate net income to the economy and __________ assets define allocation of income among investors. a. Financial, financial b. Financial, real c. Real, financial d. Real, real 13. Financial assets __________ means by which individuals hold claims on real assets. Financial assets __________ directly to the productive capacity of the economy. a. are, contribute b. are, do not contribute
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c. are not, contribute d. are not, do not contribute 14. __________ are examples of financial intermediaries. a. Commercial banks b. Insurance companies c. Investment companies d. All of the above 15. Asset allocation refers to the __________. a. allocation of the investment portfolio across broad asset classes b.
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analysis of the value of securities c. choice of specific assets within each asset class d. none of the above
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This note was uploaded on 02/22/2012 for the course FINA 3480 taught by Professor Moore during the Spring '11 term at Toledo.

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Ch01 - Investments: Background and Issues 1. Net worth...

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