Introduction to Corporate Finance 5th Canadian Edition by Laurence Booth test bank
Section Reference: Financial Instruments and Markets
Blooms: Knowledge
AACSB: Analytic
CPA: Finance
31. Which of the following is an existing stock exchange in Canada?
a) Toronto Stock Exchange (TSX)
b) Montreal Exchange (ME)
c) Vancouver Stock Exchange (VSE)
d) Winnipeg Stock Exchange (WSE)
Answer: a
Type: Definition
Difficulty: Medium
Learning Objective: Identify the basic types of financial instruments that are available and explain how they are traded.
Section Reference: Financial Instruments and Markets
Blooms: Knowledge
AACSB: Analytic
CPA: Finance
32. Which of the following was NOT one of the major objectives in the restructuring of the Canadian stock exchanges in 1999 and 2000?
a) to create a Canadian market for NASDAQ-listed companies
b) to combine all futures and options trading on one exchange
c) to make the TSX the official exchange for the trading of Canadian senior stocks
d) to create a single national exchange for trading in junior company stocks
Answer: a
Type: Concept
Difficulty: Medium
Learning Objective: Identify the basic types of financial instruments that are available and explain how they are traded.
Section Reference: Financial Instruments and Markets
Blooms: Knowledge
AACSB: Analytic
CPA: Finance
33. A market where transactions are made directly between large institutions and wealthy individuals that bypass brokers and dealers is an example of
a) the primary market.
b) the secondary market.
c) the third market.
d) the fourth market.
Answer: d
Type: Definition
Difficulty: Easy
Learning Objective: Identify the basic types of financial instruments that are available and explain how they are traded.
Section Reference: Financial Instruments and Markets
Blooms: Knowledge
AACSB: Analytic
CPA: Finance
34. The main difference between exchanges and dealer/OTC markets is
a) exchanges are a part of the primary market, while dealer and OTC markets are part of the secondary market.
b) transactions in dealer markets are conducted entirely by humans, not electronically.
c) exchanges have a physical location while dealer and OTC markets do not.
d) All of the above are differences between exchanges and dealer markets.
Answer: c
Type: Concept
Difficulty: Easy
Learning Objective: Identify the basic types of financial instruments that are available and explain how they are traded.
Section Reference: Financial Instruments and Markets
Blooms: Knowledge
AACSB: Analytic
CPA: Finance
35. The exchange that acts as the Canadian national derivatives market and conducts all options and futures trading is called the
a) Montreal Exchange (ME).
b) Winnipeg Commodity Exchange.
c) TSX Venture.
d) Alpha Exchange.
Answer: a
Type: Definition
Difficulty: Easy
Learning Objective: Identify the basic types of financial instruments that are available and explain how they are traded.
Section Reference: Financial Instruments and Markets
Blooms: Knowledge
AACSB: Analytic
CPA: Finance
36. Which is the only province where trades in unlisted securities need to be reported?
a) British Columbia
b) Quebec
c) Alberta
d) Ontario
Answer: d
Type: Definition
Difficulty: Easy
Learning Objective: Identify the basic types of financial instruments that are available and explain how they are traded.
Section Reference: Financial Instruments and Markets
Blooms: Knowledge
AACSB: Analytic
CPA: Finance
37. Which one of the following is NOT a function of brokers?
a) Manage money for clients.
b) Make the market work.
c) Charge a fee for their services.
d) Assist with the transaction process.
Answer: a
Type: Concept
Difficulty: Easy
Learning Objective: Identify the basic types of financial instruments that are available and explain how they are traded.
Section Reference: Financial Instruments and Markets
Blooms: Knowledge
AACSB: Analytic
CPA: Finance
38. Which of the following was NOT a reason for the credit crunch of 2008–09?
a) mistrust between financial intermediaries
b) illiquidity of debt markets
c) the arrest of Bernard Madoff