Stock Market & Banking Operations

What is the correct measure of risk in the CAPM?

• volatility

• standard deviation

• beta

• alpha

Which of the following is NOT one of the financial statements of a company?

• Cash Flow Statement

• Income Statement

• Statement of Shareholders' Equity

• Statement of Debtholders

Which of the following is NOT an assumption of the CAPM?

• Investors are risk neutral.

• Demand and supply of assets are equal in equilibrium.

• There are no transaction costs and no taxes.

• Investors are risk averse.

In a candlestick chart, what does a white candlestick signify?

• Market closed UP

• Market closed DOWN

• Closing price was lower than opening price

• There was higher than usual volatility

Which statement is NOT true of common shareholders?

• They have voting rights.

• They have priority in receiving payments.

• They face larger risks that debtholders.

• They are residual claimants.

Among the following choices, which is the riskiest security?

• Short-term government bonds

• Long-term government bonds

• Short-term corporate bonds

• Long-term corporate bonds

Which is NOT an example of Asset-Backed Securities (ABS)?

• Securities backed by student loans

• Securities backed by options

• Mortgage-backed securities (MBS)

• Securities backed by credit card loans

Who bears the credit risk in a Mortgage-Backed Security (MBS)?

• The SPV

• The household that took the mortgage loan

• The investors

• The loan originator

What is a Eurodollar bond?

• USD-denominated bond issued outside the U.S.

• USD-denominated bond issued in Europe

• Euro-denominated bond issued in the U.S.

• USD-denominated bond issued by a European company

If a private company wants to go public but is worried about volatility on the first day of trading, which would they choose?

• IPO

• Direct Listing

• SEO

• Remain private