Quiz Ch 02 – T/F Primary Market Exclusivity for Large Corporation IPOs
Fundamentals of Corporate Finance
Brealey, Myers, and Marcus
10th Edition
True or false: Primary markets exclusively host IPOs of large corporations.
True or false: Primary markets exclusively host IPOs of large corporations.
True or false: A publicly owned corporation is defined by its ownership, with shares held by the investing public, encompassing other corporations and institutional investors.
True or false: Investors and businesses can effectively manage and redistribute risk through the utilization of financial markets and intermediaries.
True or false: Each stock’s annual return combines dividend and capital gains yields. These returns are computed for all S&P 500 stocks. A simple average of these returns, giving equal weight to each company, is termed the ‘return on the S&P Index.’ This average frequently serves as a marker for the ‘return on the market’.
True or false: Secondary markets facilitate the trading of securities already issued among investors.
True or false: Opting to purchase 100 shares of Google by contacting your broker for trade execution would be categorized as a secondary market transaction, rather than a primary market transaction.
True or false: Internal fund generation is particularly crucial for smaller businesses.
True or false: Private companies, similar to public ones, can employ their stock price as a performance metric.
True or false: The time value indicates that a dollar today is more valuable when the interest rate is positive.
True or false: On the NYSE, trades are typically finalized through brokerage firms functioning as ‘dealers,’ acquiring securities to add or sell from their inventory. In contrast, the NASDAQ operates as an auction market, where buyers and sellers engage by presenting bids and offers, leading to price negotiation directly on the exchange floor.