INVESTMENT TUTORIAL 1 SUMISSION DEADLINE: OCT 22 1. Primary market refers to the market ____________. A. that attempts to identify mispriced securities and arbitrage opportunities. B. in which investors trade already issued securities. C. where new issues of securities are offered. D. in which securities with custom-tailored characteristics are designed. 2. Asset allocation refers to the _________. A. allocation of the investment portfolio across broad asset classes B. analysis of the value of securities C. choice of specific assets within each asset class D. none of the answers define asset allocation 3. An example of a derivative security is _________. A. a common share of General Motors B. a call option on Intel stock C. a Ford bond D. a U.S. Treasury bond 4. Money Market securities are characterized by ________. I. maturity less than one year II. safety of the principal investment III. low rates of return A. I only B. I and II only C. I and III only D. I, II and III 5. __________ assets generate net income to the economy and __________ assets define allocation of income among investors. A. Financial, financial B. Financial, real C. Real, financial D. Real, real 6. An important trend that has changed the contemporary investment market is _________. A. financial engineering B. globalization C. securitization D. all three of the other answers 7. Securitization refers to the creation of new securities by _________. A. selling individual cash flows of a security or loan B. repackaging individual cash flows of a security or loan into a new payment pattern C. taking an illiquid asset and converting it into a marketable security D. selling financial services overseas as well as in the U.S. ...
