FIN330 Managerial Finance Fall 2017

Homework#2

Type your assignment

Due date: October 3, 2017

Fill in the blanks (type your answers only, no need to type the questions)

Securities with maturity more than one year are traded in the ___________ market, while securities with maturity less than one year are traded in the __________ market. Securities traded in ___________ market usually are less risky.

Among treasury bills, stock, and bond, _______ offer the highest returns.

When a publicly traded company sells additional common stocks to raise funds, it is called an ______________ offering, and it is an activity in the

____________ market.

Existing, already outstanding securities are traded in the ______________ market which main function is to provide __________.

The two problems of the conventional IPO processes are: i) investment banks only allocate shares to __________ investors; ii) IPOs are usually price too ________.

Co. As IPO has a first day return of 20% while Co. Bs IPO has a first day return of 30%, The IPO of company _____ is more underpriced than that of Company ____.

An institution that issues its financial claims and then use the proceeds to

purchase securities issued by borrowers is called a financial ______________.

______________ are highly regulated corporations that accept money from savers, pool these funds to reduce risks by diversification, and use the funds to buy stocks, long-term bonds, or short-term debt instruments issued by business or government units

One major difference between exchange traded funds and mutual funds is that _____________ are traded only at the end of the day, while ______________ are traded throughout the trading day, like stocks. The market crash on August 14, 2015 exposed a problem of _____________ funds.

A REIT that buys, owns, and manages properties is call _________REIT.

A REIT that invests in mortgage loans and mortgage securities is called ____________REIT.

If you sell stocks to a dealer, you receive the ______ price. If you buy stocks from a dealer, you pay the _______ price

___________ are cooperative associations whose members are supposed to

have a common bond.

A(n) ____________ is any security whose value is derived from the value of some other underlying assets

A right to buy or sell an underlying asset sometimes in the future at a price determined to day is called ____________.

Forward and futures contract perform the same economic function, _________are tailor-made products while ___________are standardized products