VC Investors in Start-ups and Private Equity Investments Quiz

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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?

Liquid debt securities Signup and view all the answers

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

Security analysis Signup and view all the answers

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

Top-down approach Signup and view all the answers

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

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

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

Publicly traded stocks Signup and view all the answers

What do blockchains provide in terms of transactions?

Public distributed ledger for secure record of transactions Signup and view all the answers

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

Peer-to-peer lending Signup and view all the answers

In what context are digital tokens usually issued?

In an initial coin offering (ICO) Signup and view all the answers

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

Offers to buy securities Signup and view all the answers

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

$4,680 Signup and view all the answers

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

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

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

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

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

$100 Signup and view all the answers

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

Kept on account with the broker Signup and view all the answers

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

-41.5% 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?

60% 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?

$4,000 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?

$3,000 Signup and view all the answers

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

Both assets and equity decrease Signup and view all the answers

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

50% Signup and view all the answers

What is a margin call triggered by?

Falling below the maintenance margin Signup and view all the answers

What are the factors considered in the investment process?

Risk tolerance, liquidity needs, investment horizon, tax status Signup and view all the answers

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

Real assets Signup and view all the answers

What do fixed-income/debt securities promise?

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

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

Trading speed Signup and view all the answers

What determines whether an asset is considered a financial asset?

Claims to the income generated by real assets Signup and view all the answers

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

Fundamental and Technical Analysis Signup and view all the answers