金融市場與金融機構(gòu)基礎(chǔ)FabozziChapter14

1、FoundationsofFinancialMarketsandInstitutions,4e(Fabozzi/Modigliani/Jones)Chapter14SecondaryMarkets/MultipleChoiceQuestions/FunctionofSecondaryMarketsThekeydistinctionbetweenaprimarymarketandasecondarymarketisthat,inthesecondarymarket,.fundsflowfromtheselleroftheassettothebuyer.theissueroftheassetrec

2、eivesfundsfromthebuyer.fundsflowfromthebuyeroftheassettotheseller.theexistingissuechangeshandsintheprimarymarket.Answer:CComment:Thekeydistinctionbetweenaprimarymarketandasecondarymarketisthat,inthesecondarymarket,theissueroftheassetdoes)treceivefundsfromthebuyer.Rather,theexistingissuechangeshandsi

3、ntheecondarymarket,andfundsflowfromthebuyeroftheassettotheseller.Diff:2Topic:FunctionofSecondaryMarketsObjective:thedefinitionofasecondarymarketWithoutasecondarymarket,issuerswouldbeunableto,ortheywouldhavetopayahigherrateofreturn,asinvestorswouldincompensationforexpectedilliquidityinthesecurities.s

4、ellnewsecurities;increasethediscountratesellnewsecurities;decreasethediscountratebuynewsecurities;decreasethepricesellnewsecurities;increasethepriceAnswer:ADiff:2Topic:FunctionofSecondaryMarketsObjective:theimplicationsofpricingefficiencyformarketparticipantsInvestorsinfinancialassetsreceive/illiqui

5、dityfortheirassets./informationabouttheassetsfairorconsensusvalues.increasedthecostsofsearchingforlikelybuyersandsellersofassets.thedisadvantageofhighertransactioncosts.Answer:B/Comment:Investorsinfinancialassetsreceiveseveralbenefitsfromasecondarymarket.Suchamarketobviouslyoffersthemliquidityforthe

6、irassetsaswellasinformationabouttheassetsfairorconsensusvalues.Furthermore,secondarymarketsbringtogethermanyinterestedpartiesandtherebyreducethecostsofsearchingforlikelybuyersandsellersofassets.Moreover,byaccommodatingmanytrades,secondarymarketskeepthecostoftransactidow.Bykeepingthecostsofbothsearch

7、ingandtransactinglow,secondarymarketsencourageinvestorstopurchasefinancialassets.Diff:2Topic:FunctionofSecondaryMarketsObjective:theimplicationsofpricingefficiencyformarketparticipants2TradingLocations1)Oneindicationoftheusefulnessofsecondarymarketsisthattheyexistthroughout.A)theUnitedStates.Europea

8、ndAsia.eachstate.theworld.Answer:DDiff:1Topic:TradingLocationsObjective:theneedforsecondarymarketsforfinancialassetsIntheUnitedStates,secondarytradingofcommonstockoccurs.inanumberoftradinglocations.inDallas,Texas.ineachmajorcity.NoneoftheseAnswer:ADiff:1Topic:TradingLocationsObjective:theneedforseco

9、ndarymarketsforfinancialassetsWhichofthebelowstatementsisTRUE?IntheUnitedStates,secondarysharesaretradedonmajornationalstockexchanges(thelargestofwhichistheAmericanStockExchange)andregionalstockexchanges.IntheUnitedStates,significanttradinginstocktakesplaceontheso-calledover-the-counterorOTCmarket,w

10、hichinvolvesspecificgeographicallocations.IntheUnitedStates,thedominantOTCmarketforstocksintheUnitedStatesistheNewYorkStockExchange.IntheUnitedStates,somebondsaretradedonexchanges,butmosttradinginbondsintheUnitedStatesandthroughouttheworldoccursintheOTCmarket.Answer:DComment:IntheUnitedStates,second

11、arytradingofcommonstockoccursinanumberoftradinglocations.Manysharesaretradedonmajornationalstockexchanges(thelargestofwhichistheNewYorkStockExchange)andregionalstockexchanges,whichareorganizedandsomewhatregulatedmarketsinspecificgeographicallocations.Additionalsignificanttradinginstocktakesplaceonth

12、eso-calledover-the-counterorOTCmarket,whichisageographicallydispersedgroupoftraderslinkedtooneanotherviatelecommunicationsystems.ThedominantOTCmarketforstocksintheUnitedStatesiNasdaq.Somebondsaretradedonexchanges,butmosttradinginbondsintheUnitedStatesandthroughouttheworldoccursintheOTCmarket.Diff:2T

13、opic:TradingLocationsObjective:theneedforsecondarymarketsforfinancialassetsMarketStructuresInacontinuousmarket,pricesmayvary.becauseofthebasicsituationofsupplyanddemand.aredetermineddiscontinuouslythroughoutthetradingday.aredeterminedcontinuouslythroughoutthetradingdayevenifbuyersandsellersarenotsub

14、mittingorders.withthepatternofordersreachingthemarket.Answer:DComment:Manysecondarymarketsarecontinuous,whichmeansthatpricesaredeterminedcontinuouslythroughoutthetradingdayasDuyersandsellerssubmitorders.Forexample,giventheorderflowat10:00.,themarketclearingpriceofastockonsomeorganizedstockexchangema

15、ybe$70;at11:00.ofthesametradingday,themarket-clearingpriceofthesamestock,butwithdifferentorderflows,maybe$.Thus,inacontinuousmarket,pricesmayvarywiththepatternofordersreachingthemarketandnotbecauseofanychangeinthebasicsituationofsupplyanddemand.Diff:2Topic:MarketStructuresObjective:thedifferencebetw

16、eenacontinuousandacallmarket,ordersaregroupedtogetherforsimultaneousexecutionatthesameprice. TOC o 1-5 h z Inabullmarket/Inanefficientmarket/Inacallmarket/InabearmarketAnswer:C/Diff:2Topic:MarketStructuresObjective:thedifferencebetweenacontinuousandacallmarketWhichofthebelowstatementsisFALSE?Inacall

17、market,amarketmakerholdsanauctionforastockatcertaintimesinthetradingday(orpossiblymorethanonceinaday).Manysecondarymarketsarecontinuous,whichmeansthatpricesaredeterminedcontinuouslythroughoutthetradingdayasbuyersandsellerssubmitorders.Inacallmarket,amarketmakerholdsanauctionforastockatthesametimeeac

18、hday.D)Anauctioninacallmarketmaybeoralorwritten.Answer:CComment:Inacallmarket,amarketmakerholdsanauctionforastoclatcertaintimesinthetradingday(orpossiblymorethanonceinaday).Diff:2Topic:MarketStructuresObjective:thedifferencebetweenacontinuousandacallmarketPerfectMarketsPerfectmarketresultswhen.A)the

19、numberofbuyersandsellersissufficientlysmall,andallparticipantsaresmallenoughrelativetothemarketsothatnoindividualmarketagentcaninfluencethecommoditysprice.B)thenumberofbuyersandsellersissufficientlylarge,andallparticipantsaresmallenoughrelativetothemarketsothatallindividualmarketagentcaninfluencethe

20、commoditysprice.C)thenumberofbuyersandsellersissufficientlylarge,andallparticipantsaresmallenoughrelativetothemarketsothatnoindividualmarketagentcaninfluencethecommoditysprice.D)thenumberofbuyersandsellersissufficientlysmall,andallparticipantsaresmallenoughrelativetothemarketsothatallindividualmarke

21、tagentcaninfluencethecommoditysprice.Answer:CComment:Ingeneral,aperfectmarketresultswhenthenumberofbuyersandsellersissufficientlylarge,andallparticipantsaresmallenoughrelativetothemarketsothartoindividualmarketagentcaninfluencethecommoditysprice.Diff:2Topic:PerfectMarketsObjective:therequirementsofa

22、perfectmarketAperfectmarketresultswhenallbuyersandsellersare,andthemarketpriceisdeterminedwherethereis.price-takers;equalityofsupplyanddemand.price-makers;equalityofsupplyanddemand.price-takers;inequalityofsupplyanddemand.price-makers;inequalityofsupplyanddemand.Answer:ADiff:2Topic:PerfectMarketsObj

23、ective:therequirementsofaperfectmarketAmarketisnotperfectonlybecausemarketagentsarepricetakersbutisalsofreeoftransactionscostsandanyimpedimenttotheinteractionofsupplyanddemandforthecommodity.Economistsrefertothesevariouscostsandimpedimentsasfrictions.Frictionsinclude.bid-askspreadschargedbydealersan

24、dorderhandlingandclearancecharges.taxes(butnotoncapitalgains)andgovernment-imposedtransferfees.costsofacquiringinformationaboutthefinancialassetandrestrictionsonmarkettakers.D)financialliabilitythatabuyerorsellermaytakeandtaxesoncapitalgains.Answer:AComment:Amarketisnotperfectonlybecausemarketagents

25、arepricetakers.Aperfectmarketisalsofreeoftransactionscostsandanyimpedimenttotheinteractionofsupplyanddemandforthecommodity.Economistsrefertothesevariouscostsandimpedimentsasfrictions.Thecostsassociatedwithfrictionsgenerallyresultinbuyerspayingmorethanintheabsenceoffrictionsand/orinsellersreceivingle

26、sscommissionschargedbybrokers.Frictionsinclude:bidaskspreadschargedbydealers.orderhandlingandclearancecharges.taxes(notablyoncapitalgains)andgovernment-imposedtransferfees.costsofacquiringinformationaboutthefinancialasset.tradingrestrictions,suchasexchange-imposedrestrictionsonthesizeofapositioninth

27、efinancialassetthatabuyerorsellermaytake.restrictionsonmarketmakers.haltstotradingthatmaybeimposedbyregulatorswherethefinancialassetistraded.Diff:2/Topic:PerfectMarketsObjective:therequirementsofaperfectmarketThispracticeofsellingsecuritiesthatarenotownedatthetimeofsaleisreferredtoasbuyingshort./sel

28、lingshort./sellinglong.buyingandsellingsimultaneously.Answer:BDiff:2Topic:PerfectMarketsObjective:therequirementsofaperfectmarketIntheabsenceofaneffectiveshort-sellingmechanism,securitypriceswilltendtobebiasedtowardthe,causingamarkettodepartfromthestandardsofaperfectprice-settingsituation.viewofmore

29、pessimisticinvestorsviewofthemarketmakerviewofmoreoptimisticinvestorsviewofthemarkettakerAnswer:CDiff:2Topic:PerfectMarketsObjective:therequirementsofaperfectmarket5RoleofBrokersandDealersinRealmarkets1)arenecessarytothesmoothfunctioningofasecondarymarket.InexperiencedinvestorsInitialpublicofferings

30、InvestmentbankersBrokersanddealersAnswer:DDiff:2、/Topic:RoleofBrokersandDealersinRealMarketsObjective:whybrokersarenecessaryInvestorsneedbrokerstohelp.executetheirorders.findotherpartieswishingtosellorbuy.negotiateforgoodprices.d)Allofthese/Answer:DComment:Investorsneedbrokerstoreceiveandkeeptrackof

31、theirordersforbuyingorselling,tofindotherpartieswishingtosellorbuy,tonegotiateforgoodprices,toserveasafocalpointfortrading,andtoexecutetheorders./Diff:1Topic:RoleofBrokersandDealersinRealMarketsObjective:whybrokersarenecessaryWhichofthefollowingstatementsisFALSE?Itisimportanttorealizethatthebrokerag

32、eactivityrequiresthebrokertobuyandsellorholdininventorythefinancialassetthatisthesubjectofthetrade.Abrokerisanentitythatactsonbehalfofaninvestorwhowishestoexecuteorders.Ineconomicandlegalterms,abrokerissaidtobeanagentoftheinvestor.Thebrokerreceives,transmits,andexecutesinvestorsorderswithotherinvest

33、ors.Servicesprovidedbybrokersincluderesearch,recordkeeping,andadvising.Answer:A/Comment:Itisimportanttorealizethatthebrokerageactivitydoesnotrequirethebrokertobuyandsellorholdininventorythefinancialassetthatisthesubjectofthetrade.Diff:2Topic:RoleofBrokersandDealersinRealMarketsObjective:whybrokersar

34、enecessaryWhichofthefollowingstatementsisFALSE?Arealmarketmightalsodifferfromtheperfectmarketbecauseofthepossiblyfrequenteventofatemporaryimbalanceinthenumberofbuyandsellordersthatinvestorsmayplaceforanysecurityatanyonetime.Anunmatchedorunbalancedflowofbuyandsellorderscausesaprobleminthatthesecurity

35、spricemaychangeabruptly,eveniftherehasbeennoshiftineithersupplyordemandforthesecurity.Thefactofimbalancesinbuyandsellorderscannotexplaintheneedforthedealerormarketmaker,whostandsreadyandwillingtobuyafinancialassetforitsownaccount(toaddtoaninventoryofthefinancialasset)orsellfromitsownaccount(toreduce

36、theinventoryofthefinancialasset).Anunmatchedorunbalancedflowofbuyandsellorderscausesaprobleminthatbuyersmayhavetopayhigherthanmarket-clearingprices(orsellersacceptlowerones)iftheywanttomaketheirtradeimmediately.Answer:CComment:Thefactofimbalancesinbuyandsellordersexplainstheneedforthedealerormarketm

37、aker,whostandsreadyandwillingtobuyafinancialassetforitsownaccount(toaddtoaninventoryofthefinancialasset)orsellfromitsownaccount(toreducetheinventoryofthefinancialasset).Diff:3/Topic:RoleofBrokersandDealersinRealMarketsObjective:theroleofadealerasamarketmakerandthecostsassociatedwithmarketmakingTheca

38、nbeviewedasthepricechargedbydealersforsupplyingimmediacy TOC o 1-5 h z togetherwithshort-runpricestability(continuityorsmoothness)inthepresenceofshort-termorderimbalances./bid-askfee/bid-askpricebid-askspread/bid-askimbalanceAnswer:C/Diff:1Topic:RoleofBrokersandDealersinRealMarketsObjective:theroleo

39、fadealerasamarketmakerandthecostsassociatedwithmarketmakingBytakingtheoppositesideofatradewhentherearenootherorders,thedealerpreventsthepricefromfromthepriceatwhicharecenttradewasconsummated.materiallyconvergingmateriallydivergingimmateriallyconcurringimmateriallydivergingAnswer:BDiff:1Topic:RoleofB

40、rokersandDealersinRealMarketsObjective:theroleofadealerasamarketmakerandthecostsassociatedwithmarketmakingDealersalsohavetobecompensatedforbearingrisk.Adealerspositionmayinvolvecarryinginventoryofasecurity(alongposition)orsellingasecuritythatisnotininventory(ashortposition).Therearethreetypesofrisks

41、associatedwithmaintainingalongorshortpositioninagivensecurity.Twooftheseinclude.theriskoftradingwithsomeonewhohasinferiorinformationandtheexpectedtimeitwilltakethedealertounwindapositionanditsuncertainty.theuncertaintyaboutthefuturepriceofthesecurityandtheexpectedtimeitwilltakethedealertounwindaposi

42、tionanditsuncertainty.theriskoftradingwithsomeonewhohasinferiorinformationandtheuncertaintyaboutthefuturepriceofthesecurity.thecertaintyaboutthefuturepriceofthesecurityandtheexpectedtimeitwilltakethedealertounwindapositionanditsuncertainty.Answer:BComment:First,thereistheuncertaintyaboutthefuturepri

43、ceofthesecurity.Adealerwhohasanetlongpositioninthesecurityisconcernedthatthepricewilldeclineinthefuture;adealerwhoisinanetshortpositionisconcernedthatthepricewillrise.Thsecondtypeofriskhastodowiththeexpectedtimeitwilltakethedealertounwindapositionanditsuncertainty.Andthis,inturn,dependsprimarilyonth

44、ethicknessofthemarketforthesecurityFinally,whileadealermayhaveaccesstobetterinformationaboutorderflowsthanthegeneralpublic,therearesometradeswherethedealertakestheriskoftradingwithsomeonewhohesterinformation.Thisresultsinthebetter-informedtraderobtainingabetterpriceattheexpensethedealer.Consequently

45、,adealerinestablishingthebid-askspreadforatradewillassesswhetherornotthetradermighthavebetterinformation.Diff:2Topic:RoleofBrokersandDealersinRealMarketsObjective:theroleofadealerasamarketmakerandthecostsassociatedwithmarketmaking6MarketEfficiencyIn,investorscanobtaintransactionservicesascheaplyaspo

46、ssible,giventhecostsassociatedwithfurnishingthoseservices.aninternallyinefficientmarketanexternallyefficientmarketapricingefficientmarketanoperationallyefficientmarketAnswer:DDiff:2Topic:MarketEfficiencyObjective:whatismeantbytheoperationalefficiencyofamarketInitsBigBangof1986,theLondonStockExchange

47、.abolishedfixedbrokeragecommissions.abolishedcompetitivebrokeragecommissions.adoptedfixedbrokeragecommissions.shotdownalltypesofbrokeragecommissions.Answer:A/Diff:2Topic:MarketEfficiencyObjective:whatismeantbytheoperationalefficiencyofamarketEffectiveAugust24,2000,theminimumspreadwasreducedto(decima

48、ls),withtradesonallstocksindecimalsbeginningonAugust9,2001.one-eighthone-sixteenthonecenttwocentsAnswer:CDiff:2Topic:MarketEfficiencyObjective:whatismeantbytheoperationalefficiencyofamarket4)referstoamarketwherepricesatalltimesfullyreflectallavailableinformationthatisrelevanttothevaluationofsecuriti

49、es.InternalinefficiencyExternalefficiencyOperationalefficiencyPricingefficiencyAnswer:DDiff:2Topic:MarketEfficiencyObjective:whatismeantbythepricingefficiencyofamarketWhichofthebelowstatementsisTRUE?Inapassivestrategy,investorsseektocapitalizeonwhattheyperceivetobethemispricingofasecurityorsecuritie

50、s./Inamarketthatispriceefficient,activestrategieswillnotconsistentlygenerateareturnafterignoringtransactionscostsandtherisksassociatedwithastrategyoffrequenttrading.Inamarketwhichseemstobepriceefficient,oneinvestmentstrategyissimplytobuyandholdabroadcrosssectionofsecuritiesinthemarketMatchinginaninv

51、estmentstrategythathasthegoalofmatchingtheperformanceofsomefinancialindexfromthemarket.Answer:CComment:Apriceefficientmarkethasimplicationsfortheinvestmentstrategythatinvestorsmaywishtopursue.Inanactivestrategy,investorsseektocapitalizeonwhattheyperceivetobethemispricingofasecurityorsecurities.Inama

52、rketthatispriceefficient,activestrategieswillnotconsistentlygenerateareturnaftertakingintoconsiderationtransactionscostsandtherisksassociatedwithastrategyoffrequenttrading.Theotherstrategy,inamarketwhichseemstobepriceefficient,issimplytobuyandholdabroadcrosssectionofsecuritiesinthemarket.Someinvesto

53、rspursuethisstrategythrougindexing,whichisapolicythathasthegoalofmatchingtheperformanceofsomefinancialindexfromthemarket.Diff:2Topic:MarketEfficiencyObjective:theimplicationsofpricingefficiency7ElectronicTradingBecausethebondbusinesshasbeenratherthanbusiness,thecapitalofthemarketmakersiscritical.A)a

54、financial;anaccountingB)anaccounting;afinancialC)anagency;aprincipalD)aprincipal;anagencyAnswer:DDiff:2、/Topic:ElectronicTradingObjective:frictionsthatcauseactualfinancialmarketstodifferfromaperfectmarketThereareseveralrelatedreasonsforthetransitiontotheelectronictradingofbonds.Whichofthebelowreason

55、sisNOToneofthese?Theprofitabilityofbondmarketmakinghasdeclinedsincemanyoftheproductshavebecomelesscommodity-like./Theincreaseinthevolatilityofbondmarketshasincreasedthecapitalrequiredofbondbroker-dealers./Makingmarketsinbondshasbecomemoreriskyforthemarketmakersbecausethesizeoftheordershasincreasedtr

56、emendously.Theprofitabilityofbondmarketmakinghasdeclinedandtheirbid-offerspreadshavedecreased.Answer:AComment:Theprofitabilityofbondmarketmakinghasdeclinedsincemanyoftheproductshavebecomemorecommodity-likeandtheirbid-offerspreadshavedecreased.Diff:2Topic:ElectronicTradingObjective:theroleofadealeras

57、amarketmakerandthecostsassociatedwithmarketmakingThesameWallStreetfirmsthathavebeenthemajormarketmakersinbondshavealsobeentheofelectronictradinginbonds.cynicsattackerssupportersdetractorsAnswer:CDiff:2Topic:ElectronicTradingObjective:theroleofadealerasamarketmakerandthecostsassociatedwithmarketmakin

58、gThereareavarietyoftypesofelectronictradingsystemsforbonds.Thetwomajortypesofelectronictradingsystemsare.thecustomer-to-dealersystemsandtheexchangesystems.thedealer-to-customersystemsandtheleveragesystems.thebroker-to-dealersystemsandtheexchangesystems.thedealer-to-customersystemsandtheexchangesyste

59、ms.Answer:DDiff:2Topic:ElectronicTradingObjective:theroleofadealerasamarketmakerandthecostsassociatedwithmarketmakingWhichofthebelowstatementisFALSE?Themulti-customersystemsimplycomputerizesthetraditionalcustomer-dealermarketmakingmechanism./Single-dealersystemsarebasedonacustomerdealingwithasingle,

60、identifieddealeroverthecomputer.Dealer-to-customersystemscanbeasingle-dealersystemormultiple-dealersystem.Multi-dealersystemsprovidesomeadvancementoverthesingle-dealermethodsinceacustomercanselectfromanyofseveralidentifieddealerswhosebidsandoffersareprovidedonacomputerscreen.Answer:AComment:Thesingl