Methods of obtaining funds Flashcards
True or false. Equity instrument is a tool that an individual, government entity, or business entity can utilize for the purpose of obtaining funds.
False. Debt instrument.
True or false. Debt instrument is a documented. binding obligation that provides funds to an entity in return for a promise from the entity to repay a lender or investor in accordance with the terms of a contract.
True
True or false. Equity instrument is a contract that includes detailed provisions on the deal such as collateral involved, the rate of interest, the schedule of payments for interest and principal and the date of maturity which can be short term, intermediate term, and long term
false. debt instrument
True or false. Equity instrument is a document which serves as a legally applicable evidence of the ownership right in a firm, like a share certificate
True
True or false. Debt instruments are issued to company shareholders and are used to fund the business and where shareholders are entitled to a proportionate share in the net earnings and assets of the company
False. Equity instrument
True or false. Primary markets are the markets in which the users of funds raise funds by issuing financial instruments
true
True or false. Secondary markets are where the new stocks and bonds are sold for the first time through an initial public offering or through an investment bank
false. primary market
True or false. Secondary markets are the markets where financial instruments that have been sold previously are traded among investors
true
True or false. the broad segments of the stock market or exchange are the organized stock exchange and the over-the-counter exchange
true
True or false. organized stock exchange is the organized primary market with a physical location where trading takes place
false. it’s an organized secondary market
True or false. Stock exchange is a facility where stockholders and traders can buy and sell securities, such as shares of stock and bonds and other financial instruments
True
True or false. Listing refers to the admission of securities of a company to trading on a stock exchange and it provides an exclusive privilege to securities on the stock exchange
true
True or false. Only listed shares are quoted on the stock exchange
true
True or false. Money exchange provides transparency in transactions of lister securities and equality and competitive conditions
false. stock exchange
True or false. The decentralized market in which market participants trade stocks, commodities, currencies or other instruments directly between 2 parties and without a central exchange is the over-the-counter exchange
true