Through a PIPE (private investment in public equity), a public company that needs to raise capital quickly can provide private investors an opportunity to acquire a sizeable equity position, sometimes at a discount to publicly-quoted market prices. PIPE is the third type of private equity investments, alongside venture capital and leveraged buyouts.
Choice ““a”” is incorrect. Because they are generally accessible only to “qualified” investors deemed to have the necessary sophistication and resources to invest in these long-term, illiquid investments, private equity investments face lower regulatory oversight than public investments accessible to the entire population.
Choice ““c”” is incorrect. While having gone through a few recent decades of rapid growth, the scale of private equity markets is still small compared to global public equity markets.
C. They provide companies more capital–raising opportunities than public markets.
B. They can represent an investment in a publicly–traded company.
A. They are more regulated than publicly–traded investments.
Forward contracts and swaps are similar in two ways. First, neither requires the posting of an initial investment/funding at initiation. Secondly, both have counterparty risk because there is no clearinghouse to guarantee payments.
Choice “a” is incorrect. A cash-settled forward contract requires only one future payment. In contrast, swaps normally involve multiple payments over the life of the swap.
Choice “c” is incorrect. Both contracts have counterparty risk because there is no clearinghouse to act as an intermediary. In contrast, a clearinghouse does guarantee payments on futures contracts, which eliminates counterparty risk.
B. Do not require posting any initial funds at contract initiation.
A. Require making multiple periodic payments in the future.
C. Do not have counterparty risk because a clearinghouse guarantees performance.
Venture capital investments provide financing to start-ups, early-stage ventures, and young companies that need to finance a rapid expansion. These investments are difficult to value and generally illiquid until the enterprise becomes less risky and can raise capital from public markets. At that point, the IPO provides a mechanism for venture capital investors to trade their shares in public markets and exit the investment.
Choice ““b”” is incorrect. Public utilities usually operate as monopolies to their customer base, require a high upfront investment, have highly predictable revenues and face regulation that caps their profits. Consequently, they attract more risk-averse investors and are financed primarily through debt. Venture capital is more appropriate for high risk, high return investments.
Choice ““c”” is incorrect. Given their highly risky profile, companies that use venture capital have typically few or no other equity financing options and very limited ability to raise debt. As such, venture investors will represent a large percentage of the capital structure of those companies.
A. Could be exited through an IPO.
C. Typically represent a small percentage in the capital structure of a company.
B. Are a major source of financing for new public utility companies.
Government spending is a tool of fiscal policy. Depending on the phase of the economic cycle, government spending may be excessive, causing negative impacts, rather than its intended expansionary impact.
Choice “a” is incorrect. An overabundance of liquidity can be caused by central banking decisions which allow too much money to be circulating within the economy. Central banking decisions are a part of monetary policy, not fiscal policy.
Choice “b” is incorrect. A sudden decrease in oil supplies (e.g., from political instability) is considered to be an external economic shock, and comes from neither fiscal policy nor monetary policy.
C. An excess of government spending.
A. An overabundance of liquidity.
B. A sudden decrease in oil supplies.
Private equity investments are open to fewer institutional and individual investors than public equities. These investors typically aim to acquire controlling stakes in the companies they invest in, resulting in a lower number of investors per company.
Choice ““a”” is incorrect. While many start-ups are venture capital-backed, some of the largest publicly traded companies have been taken private through leveraged or management buy-outs. It would be difficult to conclude that as a rule, private equity-financed firms are smaller than publicly traded firms.
Choice ““c”” is incorrect. Private equity investors take an active role in the management of the companies they invest in; additionally, these companies have fewer and more concentrated investors. As a result, there is generally no need for governance processes to ensure fair representation of all shareholders in a private equity-financed firm.
A. Are smaller.
C. Employ more comprehensive governance processes.
B. Have fewer investors.
The circular flow of goods and services is an ongoing process where households supply factors of production to firms in the factor markets. The factors of production are then converted to finished goods, which are then purchased by individual households. This is known as a circular flow.
Choice ““a”” is incorrect. This answer choice does not create a circular flow where firms sell their final product back to households.
Choice ““b”” is incorrect. This answer choice incorrectly excludes that households provide factors of production, but it does indicate that households make actual payment for goods.
C. Households supplying factors of production to firms, which are then converted to finished goods and subsequently sold to households in the goods market.
A. Firms selling intermediate goods to other firms, who convert to final goods which are eventually sold.
B. Households that provide factors of production to firms which are used as inputs into manufactured items.
Factor markets are markets for the purchase and sale of factors for production, which include the land, labor, physical capital, and materials used in production. Because the owner has a shortage of labor for the upcoming production cycle, the problem pertains directly to the factors of production.
Choice ““a”” is incorrect. Capital markets exist to facilitate a company’s need to raise capital in order to invest in productive assets such as plant and equipment. Although the company is privately-financed, capital markets do not directly pertain to Jones Company’s employment situation.
Choice ““b”” is incorrect. Goods markets are markets for the output of production. While final furniture production may ultimately be negatively impacted, the owner’s primary problem is that of finding a sufficient number of laborers.
C. Factor markets.
A. Capital markets.
B. Goods markets.
Choice “a” is correct. Fiscal policy, primarily through taxation laws, can be used to redistribute income and wealth. Monetary policy, however, cannot.
Choice “b” is incorrect. Both monetary and fiscal policy can be used to create an economic environment of stable growth with low inflation. As a result, companies can feel confident in making regular coupon payments to their bondholders, in addition to making investments into new projects and profits for their shareholders.
Choice “c” is incorrect. Both monetary policy and fiscal policy are used to direct economic activity. If it believes that the economy is growing too quickly, a central bank can use monetary policy to slow the rate of growth. At the same time, the government can use taxation and spending policies to ensure the economy does not overheat.
B. An increase in companies meeting their outstanding debt obligations.
C. A decrease in the rate of growth if the economy is expected to increase too rapidly.
A. A transfer of income from wealthier individuals to poorer individuals.
Not all commodities are very illiquid and this explanation is not one of the primary disadvantages for using commodities as money. Using a commodity as money is problematic because many commodities do not have relatively stable values over time, they do not provide an easy unit of account for determining the cost of an item, and a commodity generally would not serve well as an effective medium of exchange.
Choice “b” is incorrect. Because many commodities do not have relatively stable values over time, they make a poor choice for money.
Choice “c” is incorrect. Most commodities would not provide an easy unit of account for determining costs and prices.
A. Commodities are very illiquid.
B. Many commodities do not have relatively stable values over time.
C. A commodity would not provide an easy "unit of account" for determining the cost of an item.
Holding excess reserves means less lending. This will decrease the money supply.
Choice “b” is incorrect. Holding excess reserves will decrease the money supply because there will be less lending.
Choice “c” is incorrect. Holding excess reserves will decrease the money supply, regardless of overall economic conditions.
A. Reduce the money supply.
C. Reduce the money supply during a period of inflation and increase it under recessionary conditions.
B. Increase the money supply.
A $1,000 deposit with a 25 percent reserve ratio would result in $250 dollars being kept in reserve and an available $750 to lend.
Choice “a” is incorrect. The reserve amount is $250.
Choice “c” is incorrect. The $250 reserve against the initial deposit is not added to the $1,000 initial deposit to determine the loan amount.
This is the definition of capital budgeting.
Choice ““b”” is incorrect. This is operational budgeting.
Choice ““c”” is incorrect. This is raising capital.
C. The process of determining how to raise funds to operate a business.
A. The process that a firm uses to analyze investment projects to determine which ones will be undertaken.
B. Estimating a firm's sources of revenue and probable expenses to estimate profits.
Open-end mutual funds issue and redeem shares on demand at the fund’s net asset value (NAV), which is the fund’s assets less its liabilities. Investors deal directly with the fund, and the shares do not trade on an exchange.
Choice “b” is incorrect. Closed-end funds issue shares in a market offering. Once issued, the shares trade in the secondary market and the fund itself does not commonly redeem or issue shares. The shares of a closed-end fund may trade at a discount or premium to the fund’s net asset value.
Choice “c” is incorrect. Exchange-traded funds (ETFs) are open-ended funds that allow investors to trade the shares in the secondary market. ETFs normally trade at prices very close to their NAV.
B. Closed–end fund.
C. Exchange–traded fund.
A. Open–end fund.
Systematic risk is present in the market as a whole. Because it cannot be further reduced by diversification, systematic risk will be priced and investors must be adequately compensated for taking on this risk.
Choice “a” is incorrect. Total risk can be decomposed into systematic risk and nonsystematic risk. Nonsystematic risk can be diversified away and investors will not receive any return for accepting this risk.
Choice “c” is incorrect. Nonsystematic risk can be further reduced by diversification and investors will not receive any return for accepting this risk.
C. Nonsystematic Risk
A. Total Risk
B. Systematic risk.
When they act as buyers, firms will typically purchase raw goods or use labor as factors of production into producing intermediate goods. They will then act as sellers to firms who produce final goods, which are then sold to households. Households are not sellers in the circle of production.
Choice ““a”” is incorrect. This statement is only partially correct. Although all firms are sellers, they can also act as buyers when they purchase intermediate goods.
Choice ““c”” is incorrect. This statement is inaccurate. While households provide factors of production, they do not sell intermediate or final goods.
B. Firms can be both buyers and sellers, but households can only be buyers.
C. Firms and households can both be sellers, and firms that deal with intermediate goods and services are buyers.
A. Firms are only sellers, and households are only buyers.
너는 정확하게 대답했다.
당신이 잘못 대답했습니다.
너는 시간이 없어.
점수 또는 평점을 저장하려면 로그인하거나 등록해야합니다.
텍스트에 적합한 오디오 언어를 설정하십시오.
단어를 강조 표시하여 학습을 향상시킵니다.
로그인 할 필요없이 퀴즈, 코스 및 플래시 카드를 재생할 수 있습니다. 그러나 점수를 저장하고 퀴즈, 코스 및 플래시 카드를 만들려면 로그인해야합니다. 오디오를 재생하려면 전문 계정에 로그인해야합니다.
학습을 한 차원 높여보십시오. 프로페셔널 계정으로 업그레이드하면 질문을 큰소리로 듣고 다른 많은 혜택을 누릴 수 있습니다.
귀하가 작성한 질문이나 답변에 대한 오디오가 생성됩니다.
많은 사람들이 그들이 배운 것을 듣고 더 잘 배웁니다. 외국어 학습을 위해 우리는 18 개 이상의 언어를 지원했습니다.
지원 언어로는 덴마크어, 네덜란드어, 영어, 프랑스어, 독일어, 아이슬란드 어, 이탈리아어, 일본어, 한국어, 노르웨이어, 폴란드어, 포르투갈어, 루마니아어, 러시아어, 스페인어, 스웨덴어, 터키어, 웨일스 어 등이 있습니다.
또한 단어를 소리내어 읽음으로써 자동 단어 단위 강조 기능을 지원합니다.
Apple App Store에서 볼 Topgrade 응용 프로그램을 선택하십시오.
Google Play에서 볼 수있는 Topgrade 앱을 선택합니다.