VC Investors in Start-ups and Private Equity Investments Quiz
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Questions and Answers

What is the payoff of derivative securities based on?

  • Value of the firm
  • Wheat prices
  • Real estate prices
  • Interest rates (correct)
  • Which financial market trades about $2 trillion of currency each day in London alone?

  • Bond market
  • Currency market (correct)
  • Stock market
  • Commodities market
  • In asset allocation for building an investment portfolio, what is the choice made among?

  • Specific companies
  • Broad asset classes (correct)
  • Countries
  • Cryptocurrencies
  • What is included in the money markets segment of financial markets?

    <p>Liquid debt securities</p> Signup and view all the answers

    Which type of analysis involves valuing particular securities for potential inclusion in a portfolio?

    <p>Security analysis</p> Signup and view all the answers

    What approach starts with asset allocation followed by selecting particular securities for the investment portfolio?

    <p>Top-down approach</p> Signup and view all the answers

    What is the main difference between the primary market and the secondary market?

    <p>Primary market is where new issues of securities are offered, while the secondary market is where existing securities are bought and sold.</p> Signup and view all the answers

    Which of the following is NOT an example of private equity investments?

    <p>Publicly traded stocks</p> Signup and view all the answers

    What do blockchains provide in terms of transactions?

    <p>Public distributed ledger for secure record of transactions</p> Signup and view all the answers

    What type of lending links lenders and borrowers directly without involving traditional financial institutions?

    <p>Peer-to-peer lending</p> Signup and view all the answers

    In what context are digital tokens usually issued?

    <p>In an initial coin offering (ICO)</p> Signup and view all the answers

    What is the primary function of bid prices in financial markets?

    <p>Offers to buy securities</p> Signup and view all the answers

    What is the remaining margin in the investor's account after the loan grows to $4,320?

    <p>$4,680</p> Signup and view all the answers

    Based on the percentage margin calculation provided, will the investor receive a margin call?

    <p>No, she will not receive a margin call.</p> Signup and view all the answers

    What does covering the short position in a short sale refer to?

    <p>Purchasing a share of the same stock to replace the borrowed one</p> Signup and view all the answers

    In the example provided, what is the market price of Dot Bomb stock per share?

    <p>$100</p> Signup and view all the answers

    How are the proceeds from a short sale handled according to exchange rules?

    <p>Kept on account with the broker</p> Signup and view all the answers

    What is the rate of return on the investment when using an end price of $30?

    <p>-41.5%</p> Signup and view all the answers

    What is the percentage margin when an investor initially pays $6,000 towards the purchase of $10,000 worth of stock?

    <p>60%</p> Signup and view all the answers

    If an investor initially pays $8,000 towards the purchase of $12,000 worth of stock, what is the equity in the account?

    <p>$4,000</p> Signup and view all the answers

    What is the new equity in the account if the stock price declines to $70 per share from $100 per share?

    <p>$3,000</p> Signup and view all the answers

    What happens to the account balance when the stock price decreases?

    <p>Both assets and equity decrease</p> Signup and view all the answers

    What is the current initial margin requirement according to the text?

    <p>50%</p> Signup and view all the answers

    What is a margin call triggered by?

    <p>Falling below the maintenance margin</p> Signup and view all the answers

    What are the factors considered in the investment process?

    <p>Risk tolerance, liquidity needs, investment horizon, tax status</p> Signup and view all the answers

    Which type of assets directly contribute to the productive capacity of the economy?

    <p>Real assets</p> Signup and view all the answers

    What do fixed-income/debt securities promise?

    <p>A fixed stream of income or a stream of income determined by a specified formula</p> Signup and view all the answers

    Which factor is NOT typically considered in performance evaluation of a portfolio manager?

    <p>Trading speed</p> Signup and view all the answers

    What determines whether an asset is considered a financial asset?

    <p>Claims to the income generated by real assets</p> Signup and view all the answers

    Which analysis helps in determining the views on relative returns of various asset classes?

    <p>Fundamental and Technical Analysis</p> Signup and view all the answers

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