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QUESTION 1 The Money Markets are made up of debt securities with a maturity of m

ID: 2725481 • Letter: Q

Question

QUESTION 1 The Money Markets are made up of debt securities with a maturity of more than one year. True False QUESTION 2 Under firm-committment underwriting, the investment bank has to buy any shares that are not sold to the public at the stipulated offering price in an IPO. True False QUESTION 3 An order to buy or sell a security at the current price is called a market order. True False QUESTION 4 The primary measurement unit for assessing the value of one's stake in a mutual fund is the net asset value (NAV) True False QUESTION 5 The excess return is the rate of return that is in excess of the risk-free rate. True False QUESTION 6 Arbitrage is based on the idea that assets with identical risk must have the same expected return. True False QUESTION 7 Proponents of the Efficient Marke Hypothesis (EMH) advocate an investing strategy that is heavily dependent of fundamental analysis. True False QUESTION 8 The writer of a put option agrees to buy shares at a set price within a set time-frame if the option holder desires. True False QUESTION 9 In a private defined benefit pension plan the plan sponsor (Employer) bears the investment risk, and in a private defined contribution plan the employee bears the investment risk. True False QUESTION 10 For a bank, the difference between the interest rate charged to borrowers and the interest rate paid on deposits is called the insurance premium. True False

Explanation / Answer

the Money Markets are made up of debt securities with a maturity of more than one year

Answer False

Money market have a maturity period less than one year

Under firm-committment underwriting, the investment bank has to buy any shares that are not sold to the public at the stipulated offering price in an IPO

Answer: True

Underwriter assures issuer any security not sold will be taken by them.

An order to buy or sell a security at the current price is called a market order

Answer : true

The primary measurement unit for assessing the value of one's stake in a mutual fund is the net asset value (NAV)

Answer: true

The excess return is the rate of return that is in excess of the risk-free rate

Answer: true

Arbitrage is based on the idea that assets with identical risk must have the same expected return

Answer: true

Proponents of the Efficient Marke Hypothesis (EMH) advocate an investing strategy that is heavily dependent of fundamental analysis

Answer: true

The writer of a put option agrees to buy shares at a set price within a set time-frame if the option holder desires.

Answer: true

In a private defined benefit pension plan the plan sponsor (Employer) bears the investment risk, and in a private defined contribution plan the employee bears the investment risk

Answer: True

For a bank, the difference between the interest rate charged to borrowers and the interest rate paid on deposits is called the insurance premium

Answer: false

because it is called Net iinterest margin

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