Financial Markets Quiz Copy

1.) How does a global capital market differ from a domestic market?

It involves only equity securities.
It operates within a single country.
It enables international buying and selling of financial securities.
It excludes derivatives trading.

2.) What is a debt security?

A type of investment that represents ownership in a company.
A contract that gives the holder the right to buy or sell an asset at a specific price in the future
A form of currency issued by a central bank.
Financial assets that define the terms of a loan between an issuer (the borrower) and an investor (the lender).

3.) What is trading?

Owning securities.
The process of buying and selling securities.
Holding onto securities for the long term.
Receiving dividends from investments.

4.) Compared to fixed-income securities, equity securities are generally considered:

Lower risk
Higher risk
No difference in risk
Risk-free

5.) What happens in DVP trading?

The exchange of cash and stock happens simultaneously.
The buyer pays for the stock before receiving it.
The seller delivers the stock before receiving payment.
There is no exchange of cash or stock.

6.) What is the difference between a DEMAT account and a trading account?

Both accounts serve the same purpose, but one is required for domestic trading and the other for international trading.
A trading account holds shares in physical form, while a DEMAT account is used to place buy and sell orders.
A DEMAT account holds shares in electronic form, while a trading account is used to place buy and sell orders.
There is no difference between the two accounts.

7.) What is the primary market also known as?

IPO Market
NEW ISSUES Market
Global Market
Secondary Market

8.) If the maturity date of Bond X is extended by five years, how might this impact its yield?

Yield will decrease
Maturity date has no impact on yield
Yield will increase
Bond X will be removed from the market

9.) Suppose a company raises $50 million through an IPO on the London Stock Exchange by issuing 5 million shares. Calculate the issue price per share.

$10
$15
$5
$20

10.) If Stock A has a current price of $100 and experiences a 10% increase in price, calculate the new price of Stock A.

$110
$90
$120
$10

Josh June 20, 2024

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