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1. a. b. c. Which is the major difference between Direct and In Money flows to the borrower Money is given from the lender An intermediary gets two parties together The two counterparts meet directly direct Finance: d. 2 a. IPO's b. Conducted over exchanges c. Initial Debt offerings d. Typically involves an investment bank Which of the following is not one ofthe characteristies of Primary Markets? 3. All of the below are Financial Intermediaries except: a Commercial Banks The US Treasury Life Insurance Companies Mutual Funds 4. Bonds trade on an accrual interest basis. This means an investor: An investor can sell a bond at any time without losing the interest that has accrue d during the time that they have owned the bond. An investor can buy a bond at any time and gain the interest accrued from the time of the last payment Can sell a bond at any time and keep all of the interest due that semi-annual period. An Investor can buy a bond at any time and receive an immediate interest check a. b. c. d. 5. Which of the following would be considered a risk-free investment? gold b. equity in a house c. high-grade corporate bonds d. U.S. Treasury bills Yield to Maturity is a combination of the risk free rate and a risk premium. premium compensates investors for: 6. The risk a. Credit risk and interest rate risk b. Default risk and liquidity risk. c. Issue size and coupon rate. d. increased diversification 1. a. b. c. Which is the major difference between Direct and In Money flows to the borrower Money is given from the lender An intermediary gets two parties together The two counterparts meet directly direct Finance: d. 2 a. IPO's b. Conducted over exchanges c. Initial Debt offerings d. Typically involves an investment bank Which of the following is not one ofthe characteristies of Primary Markets? 3. All of the below are Financial Intermediaries except: a Commercial Banks The US Treasury Life Insurance Companies Mutual Funds 4. Bonds trade on an accrual interest basis. This means an investor: An investor can sell a bond at any time without losing the interest that has accrue d during the time that they have owned the bond. An investor can buy a bond at any time and gain the interest accrued from the time of the last payment Can sell a bond at any time and keep all of the interest due that semi-annual period. An Investor can buy a bond at any time and receive an immediate interest check a. b. c. d. 5. Which of the following would be considered a risk-free investment? gold b. equity in a house c. high-grade corporate bonds d. U.S. Treasury bills Yield to Maturity is a combination of the risk free rate and a risk premium. premium compensates investors for: 6. The risk a. Credit risk and interest rate risk b. Default risk and liquidity risk. c. Issue size and coupon rate. d. increased diversification

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