FINA 3311 PREPARATION TEST 2026
QUESTIONS AND CORRECT ANSWERS
GRADED A+
● yield curve. Answer: What is the term for a graphical representation
of the relationship between interest rates and the maturities of debt
securities?
● underwriting, distributing, and advising. Answer: The investment
banker performs what three basic functions?
● a hybrid market, allowing for
face−to−face
trading on the floor of the stock exchange in addition to automated,
electronic trading.. Answer: The New York Stock Exchange (NYSE) is
● secondary market.. Answer: John calls his stockbroker and instructs
him to purchase 100 shares of Microsoft Corporation common stock.
This transaction occurs in the
● allowing investors to submit bids saying how many shares they'd like
to buy and at what price.. Answer: A "Dutch auction" was used by
Google to raise money in 2004. A Dutch auction involves
, ● indirect transfer using the venture capital firm.. Answer: Three ways
that savings can be transferred through the financial markets include all
of the following EXCEPT
● Aaa−rated
corporate bond maturing in 2019 not actively traded. Answer: Which of
the following securities will likely have the highest liquidity premium?
● Ford Motor Company sells a new issue of common stock to raise
funds through a public offering.. Answer: Which of the following is an
example of both a capital market and a primary market transaction?
● default−risk
premium. Answer: Which of the following premiums is NOT factored
into the price of a
long−term
Treasury bond?
● maximize shareholder wealth.. Answer: The long-run goal of the firm
is to
● Project B may be preferred to Project A if the opportunity cost of
money is high enough.. Answer: Project A is expected to generate
positive cash flow of $1 million in 10 years while Project B is expected
to generate $500,000 in 5 years. Therefore
QUESTIONS AND CORRECT ANSWERS
GRADED A+
● yield curve. Answer: What is the term for a graphical representation
of the relationship between interest rates and the maturities of debt
securities?
● underwriting, distributing, and advising. Answer: The investment
banker performs what three basic functions?
● a hybrid market, allowing for
face−to−face
trading on the floor of the stock exchange in addition to automated,
electronic trading.. Answer: The New York Stock Exchange (NYSE) is
● secondary market.. Answer: John calls his stockbroker and instructs
him to purchase 100 shares of Microsoft Corporation common stock.
This transaction occurs in the
● allowing investors to submit bids saying how many shares they'd like
to buy and at what price.. Answer: A "Dutch auction" was used by
Google to raise money in 2004. A Dutch auction involves
, ● indirect transfer using the venture capital firm.. Answer: Three ways
that savings can be transferred through the financial markets include all
of the following EXCEPT
● Aaa−rated
corporate bond maturing in 2019 not actively traded. Answer: Which of
the following securities will likely have the highest liquidity premium?
● Ford Motor Company sells a new issue of common stock to raise
funds through a public offering.. Answer: Which of the following is an
example of both a capital market and a primary market transaction?
● default−risk
premium. Answer: Which of the following premiums is NOT factored
into the price of a
long−term
Treasury bond?
● maximize shareholder wealth.. Answer: The long-run goal of the firm
is to
● Project B may be preferred to Project A if the opportunity cost of
money is high enough.. Answer: Project A is expected to generate
positive cash flow of $1 million in 10 years while Project B is expected
to generate $500,000 in 5 years. Therefore
