FIn310

Public financial markets are markets for the creation, sale and trade of illiquid securities having less standardized negotiated features.

• True

• False

Startup financing usually comes from entrepreneurs, business angels, and investment bankers.

• True
• False

The risk-free interest rate is the interest rate on debt that is virtually free of inflation risk.

• True
• False

The relationship between real interest rates and time to maturity when default risk is constant is called the term structure of interest rates.

• True
• False

Early-stage ventures tend to have large amounts of senior debt relative to more mature ventures.

• True
• False

Liquidity premiums reflect the risk associated with firms that possess few liquid assets.

• True
• False

The coefficient of variation measures the standard deviation of a venture's return relative to its expected return.

• True
• False

The weighted average cost of capital is simply the blended, or weighted cost of raising equity and debt capital.

• True
• False

Market cap is determined by multiplying a firm's current stock price by the number of shares outstanding.

• True
• False

Which of the following describes the observed or stated interest rate?

• real rate

• nominal rate

• risk-free rate

• prime rate

• inflation rate