the economics of money, banking, and financial markets

347 #

© 2014 Pearson Canada Inc.#

9. 
   

   A corporation in order to issue new shares will have to use ____.
   A) financial leverage
   B) an investment bank
   C) accumulated profits
   D) debt
   Answer: B
   Diff: 1 Type: MC Page Ref: 282
   Skill: Recall
   Objective List: 12.4 Understanding the operation of securities markets

   
   


10. 
    

    The action of guaranteeing a price for a corporation's new issue of stocks is called ____.
    A) securitization
    B) hedging
    C) intermediation
    D) underwriting
    Answer: D
    Diff: 1 Type: MC Page Ref: 282
    Skill: Recall
    Objective List: 12.4 Understanding the operation of securities markets

    
    


11. 
    

    The institutions that assist in the trading of securities in the secondary market are called
    ____.
    A) investors
    B) stockholders
    C) auditors
    D) dealers
    Answer: D
    Diff: 1 Type: MC Page Ref: 282
    Skill: Recall
    Objective List: 12.4 Understanding the operation of securities markets

    
    


12. 
    

    An investment bank purchases securities from a corporation at a predetermined price and
    then resells them in the market. This process is called ____.
    A) underwriting
    B) underhanded
    C) understanding
    D) undertaking
    Answer: A
    Diff: 1 Type: MC Page Ref: 282
    Skill: Recall
    Objective List: 12.4 Understanding the operation of securities markets