Financial Markets and Institutions

Which of the following describes a capital transfer process where a business sells its stocks or bonds directly to savers without any financial institution as an intermediary?

Which type of financial market is characterized by the trading of short-term, highly liquid debt securities with maturities of less than one year?

If an investor purchases 1,000 shares of an already-issued, outstanding stock of a corporation, this transaction takes place in which type of market?

Which type of financial institution traditionally helps companies raise capital by designing securities, buying them from the corporation, and reselling them to savers?

What is the over-the-counter (OTC) market?

When a closely held corporation offers its stock to the public for the first time, the transaction is said to occur in which market?

What is the central idea of the efficient markets hypothesis (EMH)?

How does behavioral finance attempt to explain events that seem inconsistent with the efficient markets hypothesis?

The Dow Jones Industrial Average (DJIA) consists of 30 companies that represent about what fraction of the market value of all U.S. stocks?

In the summer of 2004, Google sold its shares to the public for the first time at 85 dollars per share. By March 2017, its parent company's stock, Alphabet Inc., was selling for more than 830 dollars per share. This first-time sale of stock is known as what?

What is the key characteristic of a spot market transaction?

What is the primary difference between hedge funds and mutual funds regarding regulation?

What is a derivative security?

What does the 'bid-ask spread' in a dealer market represent?

Which type of corporation is owned by a few individuals who are typically associated with the firm's management?

What did the Chinese online retailer Alibaba's 25 billion dollar transaction in September 2014 represent?

Which of the following best describes the activity of 'crowdfunding'?

What is the primary activity of a private equity company?

What are electronic communications networks (ECNs)?

What does it mean if an IPO is 'oversubscribed'?

What is the key factor determining a stock's position on the 'efficiency continuum'?

According to the text, the S&P 500 Index is widely regarded as the standard for measuring the performance of which market segment?

Based on the text's discussion of the Twitter IPO, what was a key takeaway regarding its post-IPO performance?

What is the primary reason that a company might use securitization for its loans, such as mortgages?

Which of the following is a key characteristic of Exchange Traded Funds (ETFs)?

What is the relationship between the 'efficiency continuum' and a stock's analyst coverage?

What is the primary function of a credit union?

Which of the following is an example of a physical asset market transaction?

What does a dealer in a dealer market quote?

According to the historical data in the 'Lower Fees Motivate Investors...' box, what was the approximate average annual cost per 10,000 dollars invested in an actively managed U.S. stock fund?

What is a key difference between money markets and capital markets based on the maturity of the securities traded?

When a firm like GE sells a new issue of common stock to raise capital, in which market does this transaction occur?

What is the primary reason that efficient capital markets are necessary for economic growth?

The NASDAQ Composite Index is often considered an economic indicator for which industry?

According to behavioral finance, what is 'hindsight bias'?

What is a financial intermediary?

The text discusses Warren Buffet's 'million-dollar bet' against Ted Seides. After 9 years, the S&P 500 index fund was up 85.4 percent. What was the approximate return of the five hedge funds chosen by Seides over the same period?

What is the main function of the Financial Industry Regulatory Authority (FINRA)?

What is a primary market transaction?

Which of the following is an example of a financial institution, as described in Chapter 2?

What is a 'unicorn' in the context of startup companies?

What does a physical location exchange, like the NYSE, use to facilitate the trading process for stocks?

What is a primary reason that the market for an entire company is considered less efficient than the market for its individual stock?

In the context of behavioral finance, what does 'self-attribution bias' refer to?

What is the primary function of a stock market index like the DJIA or S&P 500?

Why do hedge funds have large minimum investment requirements, often exceeding 1 million dollars?

What is a 'financial services corporation'?

What is the key distinction between a company's stock trading in the secondary market versus the primary market?

Based on the chart showing the growth of a 1 dollar investment from 1995 to 2017, which stock index provided the highest average annualized return?

Which of these statements about physical location exchanges is accurate?