Question

Select all that is/are true or false about the financial markets.   

a. Financial markets bring the buyers and sellers of debt and equity together.

b. Stocks trading on an organized exchange such as the NYSE are also referred to as listed securities

c. Securities traded between two shareholders happen in the primary market.

d. When a firm first sells shares to the public this is a primary market transaction.

e. The OTC market has a central location and is also an auction market.
f. On a typical day in the US the largest volume of trading in auction markets occurs in the OTC market

3. Select all that is/are true about the role of financial managers and the types of financial decisions they make.

a. The duties of the financial manager includes determining the capital structure and which projects the firm should undertake.

b. The optimal financial management strategy of a financial manager is to reduce the overall risk level of the firm.

c. Capital Budgeting function involves planning and determining the firm’s short term investments.

d. Size and timing of cash flows is important in a capital budgeting decision.

e. Capital structure describes the mix of short-term liabilities a firm uses to finance its short-term assets.

f. Determining the appropriate level of inventory is a working capital management function.

Answer 1

Financial Market

a.True

b. True

c. False ; security traded between two shareholders called secondary market

d.True

e. False; OTC market is totally decentralized and customized contracts are established over there.

f. False

Exchanges are having far more volume of trading as compared to OTC.

DUTIES OF FINANCE MANAGER

a. True

b. True

c. False it involves decision of long time period

d. True

e. False it shows the long term Equity and long term loans or debt

f. True