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    The primary role of organized security exchanges is to raise

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    Question 1
    The primary role of organized security exchanges is to raise capital (money) for firms.
    Answer
    TRUE
    FALSE
    Question 2

    In an "underwriting" the investment banker guarantees the firm selling the securities a specified amount.
    Answer
    TRUE
    FALSE

    T
    Question 3

    In a "best effort" sale of securities, the risk of the sale rests with the investment banker.
    Answer
    TRUE
    FALSE

    Question 4

    The "syndicate's" role in an underwriting is to sell the new issue of securities.
    Answer

    TRUE
    FALSE
    Question 5

    The preliminary prospectus ("red herring") does not include the offer price of a new stock issue.
    Answer

    TRUE
    FALSE
    Question 6

    Which of the following is not a short-term, liquid asset?
    Answer
    a. negotiable certificate of deposit
    b. U.S. Treasury bills
    c. corporate stock
    d. commercial paper
    Question 7

    Money market mutual funds invest in
    1. commercial paper
    2. repurchase agreements
    3. corporate bonds

    Answer
    a. 1 and 2
    b. 1 and 3
    c. 2 and 3
    d. All of these choices
    Question 8

    The deregulation of the banking system has
    Answer
    a. increased the growth of money market mutual funds
    b. resulted in lower interest rates
    c. blurred distinctions among financial intermediaries
    d. reduced the power of the SEC
    Question 9

    Commercial paper is
    Answer
    a. a short-term unsecured debt of a corporation
    b. a short-term secured debt of a corporation
    c. a long-term unsecured debt of a corporation
    d. a long-term secured debt of a corporation

    Question 10

    Which of the following does not have default risk?
    Answer

    a. money market mutual funds
    b. commercial paper
    c. negotiable certificates of deposit
    d. treasury bills

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    https://brainmass.com/business/finance/the-primary-role-of-organized-security-exchanges-is-to-raise-454709

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    Solution Summary

    The primary role of organized security exchanges is to raise capital (money) for firms.
    Answer
    TRUE
    FALSE
    Question 2

    In an "underwriting" the investment banker guarantees the firm selling the securities a specified amount.
    Answer
    TRUE
    FALSE

    T
    Question 3

    In a "best effort" sale of securities, the risk of the sale rests with the investment banker.
    Answer
    TRUE
    FALSE

    Question 4

    The "syndicate's" role in an underwriting is to sell the new issue of securities.
    Answer

    TRUE
    FALSE
    Question 5

    The preliminary prospectus ("red herring") does not include the offer price of a new stock issue.
    Answer

    TRUE
    FALSE
    Question 6

    Which of the following is not a short-term, liquid asset?
    Answer
    a. negotiable certificate of deposit
    b. U.S. Treasury bills
    c. corporate stock
    d. commercial paper
    Question 7

    Money market mutual funds invest in
    1. commercial paper
    2. repurchase agreements
    3. corporate bonds

    Answer
    a. 1 and 2
    b. 1 and 3
    c. 2 and 3
    d. All of these choices
    Question 8

    The deregulation of the banking system has
    Answer
    a. increased the growth of money market mutual funds
    b. resulted in lower interest rates
    c. blurred distinctions among financial intermediaries
    d. reduced the power of the SEC
    Question 9

    Commercial paper is
    Answer
    a. a short-term unsecured debt of a corporation
    b. a short-term secured debt of a corporation
    c. a long-term unsecured debt of a corporation
    d. a long-term secured debt of a corporation

    Question 10

    Which of the following does not have default risk?
    Answer

    a. money market mutual funds
    b. commercial paper
    c. negotiable certificates of deposit
    d. treasury bills

    $2.19

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