→ Which of the following securities will likely have the highest liquidity premium ?

Aaa-rated corporate bond maturing in 2022 not actively traded

→ When an investmt banking firm “underwrites” an issue of securities, performing which ?
offering to purchase the securities from the firm, thereby assuming the risk of resale to investors
→Which of the following is an example of both a capital market and a primary market transaction ?
… sells a new issue of common stock to raise funds through a public offering
→Which of the following is NOT a valid theory that attempts to explain the shape of term…
the Fisher Effect theory
→Which of the following premiums is NOT factored into the price of a long-term US Treasury bond?
a default-risk premium
→ In August 2004, Google first sold its common stock to the public at $85 per share… This is an
example
a primary market transaction
→ Assuming two investmts have equal lives, a high discount rate tends to favor
the investmt with large cash flow early
→ Suppose a stock is not currently paying dividends, and its manager has announced that…
The value of the stock could be found by discounted cash flow (DCF)…
→ An inverted yield curve
Exists when short-term rates exceed long-term rates
→ Which of the following statements is correct ?
When investors require higher rates of return for investmts that demonstrate higher variability of
returns, this is evidence of risk aversion
→ Standard deviation is a measure of which of the following ?
Volatility
→ As long as the inflation rate is positive, a security’s real rate of return will be ___ the nominal
rate of return
Less than
→ Which of the following statements is correct concerning market efficiency
In a strong form of market efficiency, firms’ stock are correctly priced when issued
→ To convince investors to accept greater volatility, you must
Increase the risk premium
→ Which of the following corresponds to a wide return frequency distribution ?
Relatively high standard deviation
Relatively large risk premium