Quiz Ch 02 – Identifying Capital Market Instruments
Fundamentals of Financial Management, Concise
Brigham and Houston
09th Edition
Which option serves as a capital market instrument?
Which option serves as a capital market instrument?
Which option represents a primary market transaction?
Your recent sale of 200 Disney shares through a broker signifies which type of transaction?
True or false: To determine the annual rate of return for a stock, add its yearly dividend and price change, then divide by the initial price.
True or false: The NYSE is categorized as a ‘spot’ market due to its physical location, whereas the NASDAQ, lacking a central physical location, is not considered a spot market.
True or false: When a corporation’s shares are predominantly owned by a select group of individuals affiliated with the company’s management, it is referred to as closely held stock.
True or false: Hedge funds share certain similarities with mutual funds; however, the main distinctions lie in their relatively lower regulation, greater purchasing flexibility, and the limitation of their investors to affluent, experienced individuals and institutions.
True or false: The acronym IPO stands for ‘initial public offering’, denoting the process of a company’s first issuance of stock to the public, rather than ‘individual purchase order’.
True or false: A common stock share is NOT a derivative, while an option to purchase the stock qualifies as a derivative due to its value being derived from the stock’s value.
True or false: Private markets, such as the NYSE, involve transactions managed by organization members, whereas public markets, including the NASDAQ, allow anyone to engage in transactions.