CHAPTER 16-2

6 MC QUESTIONS

Q: The level of market efficiency that excludes insider trading is the:

Multiple Choice

strong form.

doubly strong form.

semi-weak form.

semi-strong form.

Q: In a three-sector economy, the major supplier of funds for investment is:

Multiple Choice

corporations and other business entities.

the federal government.

the provincial and municipal governments.

households.

Q: When investors perceive that the markets are unfair and financial investments do not properly reflect the risks and returns, then:

Multiple Choice

only the poor will shy away from investing.

capital accumulation is inhibited.

wealthy individuals will invest more to make more.

people invest more to make speculating profits.

Q: Organized securities exchanges have all of the following characteristics with the exception of:

Multiple Choice

each exchange has multiple locations.

brokers are members of the exchange by virtue of having purchased a "seat".

brokers represent actual buyers and sellers.

each exchange has a central location where buying and selling occurs.

Q: In secondary markets, the security with the largest annual value of trading is:

Multiple Choice

bankers' acceptances.

commercial paper.

treasury bills.

Canada bonds.

Q: The developments of the European Common Market (with a central bank, common currency, and free trade), NAFTA, and the rise of Chinese capitalism:

Multiple Choice

decreased regional competition and increased global competition for funds.

increased regional competition and decreased global competition for funds.

decreased the competition for funds on a global scale.

increased the competition for funds on a global scale.