Quiz Detail

Q1 . An initial public offer (IPO) is the first issue of capital made to the public

A True

B False

Q2 . Eurobonds are debt securities that are issued

A Outside the domestic capital markets of the issuer in a currency that is the domestic currency of the place of issue

B Outside the domestic capital markets of the issuer in a currency that is neither the domestic currency of the issuer nor the domestic currency of the place of issue

C Outside the domestic capital markets of the issuer in a currency that is the domestic currency of the issuer

D Inside the domestic capital markets of the issuer in a currency that is neither the domestic currency of the issuer nor the domestic currency of the place of issue

Q3 . Which of the following statements is false

A Corporate bonds always pay semi annual coupons

B The face value on corporate bonds is repaid when the bonds mature

C Corporate bonds are debt instruments

D The issuer of corporate bonds receives the face value of the bonds at issue

Q4 . In order for firms issuing convertible notes to claim tax deductions on interest payments, which of the following conditions must be met

A The interest rate is fixed

B Total funds raised from the issue of convertible notes must not exceed $500 million

C Conversion must take place two and ten years from the date of issue without exception

D Issuers decide when to convert notes to ordinary shares

Q5 . Preference shares are best described as hybrid debt instruments

A True

B False

Q6 . Hybrid securities are equity securities which act like debt

A True

B False

Q7 . Which of the following is not a potential benefit of leasing

A Taxation benefits

B Increased turnover

C Speed in acquisition of assets

D Avoidance of obsolescence

Q8 . A person who applies for and buys shares issued under a prospectus and sells them on the first day of trade on the market for a profit is a

A Bear

B Bull

C Stag

D Dead cat

Q9 . An option is an obligation to undertake a trade by a given date at a given price

A True

B False

Q10 . Which of the following statements is true

A Subordinated debt ranks above ordinary shareholders in the event of liquidation

B Subordinated debt ranks above other similar classes of debt in the event that a firm is liquidated

C All of the above

D Unsubordinated debt takes a lower ranking than other debt of similar characteristics

Chapter 12: Long Term External Finance

Q1 . An initial public offer (IPO) is the first issue of capital made to the public

Q2 . Eurobonds are debt securities that are issued

Q3 . Which of the following statements is false

Q4 . In order for firms issuing convertible notes to claim tax deductions on interest payments, which of the following conditions must be met

Q5 . Preference shares are best described as hybrid debt instruments

Q6 . Hybrid securities are equity securities which act like debt

Q7 . Which of the following is not a potential benefit of leasing

Q8 . A person who applies for and buys shares issued under a prospectus and sells them on the first day of trade on the market for a profit is a

Q9 . An option is an obligation to undertake a trade by a given date at a given price

Q10 . Which of the following statements is true