Question

Answer all of these questions with the right question number next to the correct choice (letter).

11) You are the CEO of Cute Pups Company, which makes blue jeans for dogs. Sales of your products are taking off so you decide to go public. However, without an MBA, you have no clue how to price and distribute your stock. You would probably hire the services of a(n):

Investment banking house

Savings and loan

Commercial bank

Mutual fund

12)

The SEC (Securities and Exchange Commission) requires companies to file annual financial statements. This disclosure is an example of:

Allocational efficiency

Operational efficiency

Informational efficiency

Frictionless markets

13)

Which of the following describes the main role of financial intermediaries:

Set the price of stocks, bonds, and other assets

Bridge gaps between savers and debtors

All of the above

Help the Federal Reserve set interest rates for other investors

15) After graduation you decide it is time to start planning for the future. You set up a retirement fund that is estimated to earn 5% interest over the next 20 years. What type of markets are you most likely to invest in?

Capital markets

Money markets

It is impossible to tell from the information given.

Private markets

Answer 1

11. Investment banker will be providing details about listing of the company on the stock exchanges.

All the other options are false as they are not related to listing of securities as underwriters.

Correct answer will be option (A) investment banking house.

12.Informational efficiency which are required by securities and stock exchanges will be requiring the company to file the public information.

Correct answer will be option (C) informational efficiency

13. Set the price of stocks,bonds and other assets and bridge gaps between savers and debtors both describes the main role of financial intermediaries.

So the correct option is (C) all of the above

14.After graduation you decide it is time to start planning for the future .You set up a retirement fund that is estimated to earn 5% interest over next 20 years .In this case you are most likely to invest in .capital markets.

So the correct option is (A) capital markets and rest of the options are false.