Closed-End and Exchange-Traded Funds Quiz
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Questions and Answers

What financial instrument represents ownership in a corporation?

  • ETF
  • Mutual fund
  • Stock (correct)
  • Bond

    • Which type of bond has no specific collateral backing it?

  • Callable bonds
  • Unsecured/Debenture bonds (correct)
  • Conver琀椀ble bonds
  • Secured bonds

    • What is a characteristic of a sinking fund in the context of bonds?

  • Relieves the issuer from paying interest on the bonds
  • Provides funds to repay the bond principal at maturity (correct)
  • Increases the debt burden for the issuer
  • Allows bondholders to convert their bonds into stocks

    • Which financial entity assists in the sale or issue of new securities?

    <p>Investment bank</p> Signup and view all the answers

    What is the advantage of issuing a bond with a call provision?

    <p>Can be repaid before maturity</p> Signup and view all the answers

    In the context of equity financing, what is true about preferred stock?

    <p>Dividends are not guaranteed</p> Signup and view all the answers

    What does an investment banker typically do in the financial market?

    <p>Assist in issuing new securities</p> Signup and view all the answers

    What financial market is characterized by temporary sources of funds and tax-deductible interest payments?

    <p>Bond market</p> Signup and view all the answers

    What is a characteristic of convertible bonds?

    <p>They can be exchanged for other securities</p> Signup and view all the answers

    What is the primary advantage of holding an Index Fund?

    <p>Lower fees compared to Mutual Funds</p> Signup and view all the answers

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