capital markets quiz A

Real assets are _______.

• assets used to produce goods and services

• always the same as financial assets

• always equal to liabilities

• claims on a company's income

The material wealth of society is determined by the economy's ______, which is a function of the economy's _______.

• investment bankers; financial assets

• investment bankers; real assets

• productive capacity; financial assets

• productive capacity; real assets

An example of a real asset is: I. A college education II. Customer goodwill III. A patent

• I only

• II only

• I and III only

• I, II, and III

Which of the following are financial assets? I. Debt securities II. Equity securities III. Derivative securities

• I only

• II and III only

• I and II only

• I, II, and III

______ is not a derivative security.

• A share of common stock

• A call option

• A futures contract

• None of the options (All of the answers are derivative securities.)

______ represents an ownership share in a corporation.

• Preferred stock

• A fixed-income security

• Common stock

• A call option

The success of common stock investments depends on the success of _______.

• derivative securities

• government methods of allocating capital

• fixed-income securities

• the firm and its real assets

Money market securities are characterized by: I. Maturity less than 1 year II. Safety of the principal investment III. Low rates of return

• I, II, and III

• I and III only

• I and II only

• I only

In a market economy, capital resources are primarily allocated by _______.

• investment bankers

• corporation CEOs

• financial markets

• governments

Market signals will help to allocate capital efficiently only if investors are acting _______.

• as dominant forces in the economy

• as directed by financial experts

• on the basis of their individual hunches

• on accurate information