Question

A financial manager is quotes saying, “when evaluating projects, we’re only concerned with the relevant incremental after tax cash flows. Therefore, because depreciation is a noncash expense, we should ignore its effects when evaluating projects.”

Fill in the blanks with the most appropriate word or phrase.

1. The sale of a new bond issue takes place in the ________ markets
2. Equity instruments are traded in the ______markets
3. Short term securities such as treasure bills and banker’s acceptances are bought in the ____ markets.
4. a/An ______ is the first time a company’s stock is sold to the public.
5. The principle of finance which supports the fact that the markets are quick and the prices are fair is called the _______ principle.

Answer 1

1. The sale of a new bond issue takes place in the auction markets
2. Equity instruments are traded in the secondary markets
3. Short term securities such as treasury bills and banker’s acceptances are bought in the money markets
4. An Initial Public Offering (IPO) is the first time a company’s stock is sold to the public.
5. The principle of finance which supports the fact that the markets are quick and the prices are fair is called the efficient market principle.

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