Capital Markets (Dealers) module:

By admin July 13, 2023 451 No comment

Welcome to your Capital Markets (Dealers) module:

Which of the following is a factor that influences the pricing of securities?

Supply and demand dynamics

All of the above

Interest rates

Market volatility

Which of the following is a role of securities regulators in the capital markets?

To regulate the markets and enforce compliance

To provide investment advice to individual investors

To provide education and training to capital market participants

To issue new government securities

What is the purpose of an initial public offering (IPO)?

To issue new government securities

To facilitate the trading of existing securities

To provide financing for companies

To provide liquidity by buying and selling securities

What is the difference between a stock exchange and an over-the-counter (OTC) market?

Stock exchanges only trade stocks, while OTC markets trade various securities.

Stock exchanges are regulated, while OTC markets are unregulated.

Stock exchanges have higher liquidity than OTC markets.

Stock exchanges have physical trading floors, while OTC markets are electronic.

Which of the following is an example of an equity market index?

Consumer Price Index (CPI)

London Interbank Offered Rate (LIBOR)

Dow Jones Industrial Average

Gross Domestic Product (GDP)

Which of the following is an example of a derivative product in the capital markets?

Corporate bond

Treasury bill

Stock option

Real estate investment trust (REIT)

Which of the following is an example of an equity market index?

Gross Domestic Product (GDP)

Dow Jones Industrial Average

Consumer Price Index (CPI)

London Interbank Offered Rate (LIBOR)

What is the purpose of a prospectus in the capital markets?

To provide information about the company issuing securities

To regulate the capital markets and enforce compliance

To set the trading price of the securities

To assess the credit rating of the securities

Which of the following is a role of securities regulators in the capital markets?

To provide liquidity by buying and selling securities

To underwrite and distribute securities

To regulate the markets and enforce compliance

To issue new securities and facilitate their sale

10.

Which of the following is a characteristic of a well-functioning capital market?

Inflexible contract terms

Limited market participants

Lack of transparency in pricing

High trading volumes and liquidity

11.

What is the primary purpose of the Capital Markets (Dealers) module?

To provide guidelines for capital market transactions

To educate dealers about capital market products

To enforce compliance in capital market activities

To regulate capital markets

12.

What is the main function of capital markets?

To facilitate borrowing and lending

To provide investment opportunities

To regulate financial institutions

To issue government securities

13.

What is the purpose of settlement in the capital markets?

To assess the credit rating of securities

To ensure the timely transfer of securities and funds between buyers and sellers

To determine the initial trading price of securities

To provide collateral for capital market transactions

14.

What is the purpose of margin requirements in the capital markets?

To provide collateral for capital market transactions

To set minimum trading volumes for securities

To limit leverage and manage risk

To ensure the solvency of market participants

15.

What is the purpose of credit ratings for debt securities?

To determine the trading price of the securities

To evaluate the creditworthiness of the issuers

To provide voting rights to investors

To assess the liquidity of the securities

16.

Which of the following is an example of a money market instrument?

Common stock

Real estate investment trust (REIT)

Treasury bill

Corporate bond

17.

Which of the following is a characteristic of stock markets?

They have a fixed maturity date.

They have a guaranteed return on investment.

They provide fixed interest payments to investors.

They represent ownership in a company.

18.

What is the role of investment banks in the capital markets?

To issue government securities

To provide education and training to capital market participants

To underwrite and distribute securities

To provide investment advice to individual investors

19.

What is the main purpose of money market instruments?

To facilitate short-term borrowing and lending

To provide long-term financing for companies

To issue government securities

To enable individuals to invest in real estate

20.

Which of the following is a characteristic of preferred stock?

It has voting rights in corporate matters.

It represents ownership in a company.

It pays dividends to investors before common stockholders.

It has higher potential for capital appreciation than common stock.

21.

What is the purpose of a stock exchange?

To issue government securities

To facilitate the trading of securities

To provide education and training to capital market participants

To provide investment advice to individual investors

22.

What is the purpose of market makers in the capital markets?

To provide liquidity by buying and selling securities on a regular basis

To issue new securities and facilitate their sale

To regulate the markets and enforce compliance

To provide education and training to capital market participants

23.

What is the difference between primary and secondary markets?

Primary markets are regulated, while secondary markets are unregulated.

Primary markets involve the issuance of new securities, while secondary markets involve the trading of existing securities.

Primary markets are open to individual investors, while secondary markets are restricted to institutional investors.

Primary markets have higher liquidity than secondary markets.

24.

Which of the following is an example of a primary market transaction?

Selling government bonds to an institutional investor

Purchasing newly issued shares of an initial public offering (IPO)

Trading corporate bonds on a secondary market

Buying shares of a publicly traded company on the stock exchange

25.

Which of the following is a characteristic of debt securities?

They pay dividends to investors.

They have a fixed maturity date and pay interest.

They represent ownership in a company.

They provide voting rights to investors.

26.

Which of the following is a characteristic of mutual funds?

They have a fixed maturity date.

They pay fixed interest to investors.

They pool money from multiple investors to invest in a diversified portfolio of securities.

They represent ownership in a company.

27.

Which of the following is an example of a capital market product?

Money market fund

Savings account

Checking account

Corporate bond

28.

Which of the following is a characteristic of a well-functioning capital market?

Inflexible contract terms

High trading volumes and liquidity

Lack of transparency in pricing

Limited market participants

29.

Which of the following is a characteristic of government securities?

They have higher credit risk compared to corporate bonds.

They are highly speculative in nature.

They are issued by federal, state, or local governments.

They pay higher interest rates than municipal bonds.

30.

Which of the following is a characteristic of equity securities?

They represent ownership in a company.

They pay fixed interest to investors.

They have a fixed maturity date.

They have a guaranteed return on investment.

31.

What is the role of underwriters in the capital markets?

To provide liquidity by buying and selling securities

To issue new securities and facilitate their sale

To provide education and training to capital market participants

To regulate the capital markets and enforce compliance

32.

What is the difference between commercial paper and certificates of deposit?

Commercial paper is issued by banks, while certificates of deposit are issued by corporations.

Commercial paper has a shorter maturity than certificates of deposit.

Commercial paper is traded on exchanges, while certificates of deposit are traded over the counter.

Commercial paper pays fixed interest, while certificates of deposit pay variable interest.

33.

Which of the following is a type of fixed-income security that represents a loan made by an investor to a borrower?

Exchange-traded funds (ETFs)

Stocks

Bonds

Mutual funds

34.

Which of the following is NOT a type of capital market instrument?

Bonds

Derivatives

Stocks

Mutual funds

35.

What is the purpose of a margin account in the capital markets?

To provide collateral for capital market transactions

To limit leverage and manage risk

To ensure the solvency of market participants

To set minimum trading volumes for securities

36.

What is the purpose of risk management in the capital markets?

To eliminate all risks associated with securities transactions

To encourage speculative trading in capital market products

To maximize leverage and potential returns

To minimize the impact of potential losses

37.

What is the role of regulators in the capital markets?

To issue new securities and facilitate their sale

To regulate the markets and enforce compliance

To act as market makers and provide education

To provide liquidity and facilitate trading

38.

Which of the following is NOT a benefit of using mutual funds for investment?

Guaranteed returns on investment

Liquidity of shares for easy buying and selling

Professional management of the portfolio

Diversification of investments

39.

What is the main purpose of an exchange-traded fund (ETF)?

To provide financing for companies

To provide education and training to capital market participants

To issue government securities

To facilitate the trading of a basket of securities on an exchange

40.

What is the purpose of market makers in the capital markets?

To provide education and training to capital market participants

To issue new securities and facilitate their sale

To regulate the markets and enforce compliance

To provide liquidity by buying and selling securities on a regular basis

1 out of 4

Time's up

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