Which of the following is NOT a role or function of an investment banker?

A.Underwriter

B.Budgeting planner

C.Market maker

D. Advisor

Question 2 is unpinned. Click to pin.

When selling stock to the public for the first time, to determine the stock's value an investment banker will analyze which of the following?

A.The firm's industry

B.Financial characteristics

C.Anticipated earnings

D.Dividend-paying capability

E.All of the answers are correct.

Question at position 3

The Glass-Steagall Act required banks to combine their commercial and investment banking operations into the same entity.

The Glass-Steagall Act required banks to combine their commercial and investment banking operations into the same entity.

A.True

B.False

Question at position 4

Which of the following best describes raising of funds through private placement?

A.Placing debt securities on a private securities exchange.

B.Selling securities directly to insurance companies, pension funds, and wealthy individuals.

C.Raising funds without a public disclosure of terms.

D.None of the listed answers are correct.

Question at position 5

A bond indenture supplements a bond agreement and covers every detail of a bond issue.

A.True

B.False

Question at position 6

Which of the following features allows a corporation to retire a debt issue before maturity?

A.A conversion feature

B.A sinking-fund provision

C.A call feature

D.A serial payment provision

Question at position 7

How is the "current yield" for a bond calculated?

A.The stated interest payment divided by the current price of the bond.

B.The market interest rate multiplied by the stated rate of the bond.

C.The stated interest payment multiplied by the current price of the bond.

D.The effective interest rate divided by the par value of the bond.

Question at position 8

Which of the following is NOT an benefit of debt financing?

A.Interest payments are tax deductible.

B.The obligation may be fixed in nature.

C.In inflationary times, debt may be paid off with "cheaper dollars".

D.The use of debt may raise the cost of capital to the firm.

Question at position 9

Which of the following is NOT a right generally conferred to common shareholders?

A.A residual claim to income not paid out to creditor or preferred shareholders.

B.A voting right to elect the Board of Directors.

C.The right to select the Chief Executive Officer (CEO).

D.A right to purchase new shares.

Question at position 10

Preferred shareholders generally have a right to receive a stipulated dividend before any payments to common shareholders, but the corporation may elect not to pay it in a given year.

A.True

B. False

Question at position 11

Which of the following is a reason as to why a company may issue preferred stock as a means to raise capital?

A.Preferred stock is always a less expensive way to raise capital.

B.May benefit the company by expanding the shareholder voting base.

C.Can be used as a means to expand it's capital base without diluting common stock ownership or incurring additional debt.

D.None of the listed answers are correct.

Question at position 12

Which of the following has the highest claim to assets in the case of a bankruptcy?

A.Bond holders

B.Common Shareholders

C.Preferred Shareholders

D.All of the listed answers have equal claim to assets in the case of a bankruptcy