CAPITAL MARKETS EXAM QUESTIONS AND ANSWERS LATEST UPDATE
2024/2025 ALL ANSWERS 100% CORRECT BEST GRADED A+ FOR
EXCELLENT PASS
capital market - CORRECT ANSWERS long term, like bonds, common stock, preferred
stock
international capital markets emerged as result - CORRECT ANSWERS adoption of
principles of capitalism. global privatization of government owned enterprises. "free
trade"
internat. cap. markets as source of funds - CORRECT ANSWERS opportunity for
companies to raise debt and equity capital at lowest cost.
Government securities - CORRECT ANSWERS treasury- manages fed. gov. debt in order
to balance flow of funds.
Treasury - CORRECT ANSWERS sells short or long term securities to finance deficits or
retire debt in case of surplus
federally sponsored credit agencies - CORRECT ANSWERS governmental units issuing
securities on a separate basis from those sold by US treasury
Fannie Mae - CORRECT ANSWERS Federal National Mortgage Association
state and local securities - CORRECT ANSWERS municipal securities or tax-exempt
offerings
local securities purchased by - CORRECT ANSWERS investors in high marginal tax
brackets. supported by revenue, generating projects, general revenue
corporate bonds - CORRECT ANSWERS debt instruments having a fixed life and to be
repaid at maturity
as bonds come due and are paid - CORRECT ANSWERS corporation normally replaces
debt with new bonds
, CAPITAL MARKETS EXAM QUESTIONS AND ANSWERS LATEST UPDATE
2024/2025 ALL ANSWERS 100% CORRECT BEST GRADED A+ FOR
EXCELLENT PASS
preferred stock - CORRECT ANSWERS least used since the dividend is not tax-
deductible to the corporation
common stock - CORRECT ANSWERS sold by companies desiring new equity capital
common stock sold as either - CORRECT ANSWERS 1. new issue in an initial public
offering or
2. as a secondary offering
treasury stock - CORRECT ANSWERS company purchases its own stock
internally generated funds include - CORRECT ANSWERS retained earnings and cash
flow added back from depreciation
composition of internal funds is function of - CORRECT ANSWERS corporate
profitability
dividends paid
resultant retained earnings
depreciation tax shield
supply of capital funds - CORRECT ANSWERS household sector, direct investment,
indirect investment
household sector - CORRECT ANSWERS major supplier of capital funds
direct investment - CORRECT ANSWERS households purchasing individual stocks and
debt securities (bonds)
indirect investments - CORRECT ANSWERS household savings funneled to financial
intermediaries (commercial bank, savings bank, credit unions) that make investments
in capital markets
capital markets divided into - CORRECT ANSWERS functional subsets. each market
serves type of security
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