金融市场与金融机构基础 Fabozzi Chapter14
Fabozzi_金融市场与金融机构基础课后答案12
C H A P T E R12R I S K/R E T U R N A N D A S S E T P R I C I N G M O D E L S PORTFOLIO THEORYPortfolio theory proceeds from the axiom that investors seek to maximize returns given some risk level they are willing to accept. Portfolios that maximize the expected return from an investment subject to a given level of risk are said to be efficient. From among efficient portfolios, the one which risk-averse investors prefer, is said to be an optimal portfolio. To construct an efficient portfolio, it is necessary to understand what is meant by expected return and risk.Investment ReturnThe return on an investment portfolio during a given interval of time is equal to the change in value of the portfolio plus any distributions received from the assets in the portfolio. These returns are expressed as a fraction of the initial portfolio value.R = (V1– V0 + D) / V0where V1 = portfolio value at the end of intervalV0 = portfolio value at the beginning of intervalD = cash distribution during intervalFor purposes of comparison, returns are expressed per unit of time, usually a year. If several years of units are included in the time horizon, then the return can be computed by averaging the return over the several unit intervals. There are three averaging methods in use: (1) the arithmetic average return (simple average of total return divided by number of time units), (2) time-weighted rate of return (also referred to as the geometric average), (3) dollar weighted return. One measure of risk is the extent to which future portfolio values are likely to diverge from the expected value.Portfolio RiskPortfolio risk can be measured in terms of the dispersion of returns about the expected value or mean return. The variance of return is a weighted sum of the squared deviations from the expected return. The standard deviation is the square root of the variance.Expected Portfolio ReturnA particularly useful way to quantify the uncertainty about the portfolio return is to specify the probability associated with each of the possible future returns and calculate the expected value of the portfolio return. The expected value is the weighted average of the possible outcomes, where the weights are the relative chances of occurrence. The expected return on the portfolio isexpressed as:E(R) = P1 R1 + P2 R2 + . . . + P N R NProbability distributions can take various shapes. For a symmetrical distribution, the dispersion of returns on one side of the expected return is the same as the dispersion on the other side of the expected return. The risk of a portfolio is measured by the variance and standard deviation of returns.DiversificationDiversification results from combining securities whose returns are less than perfectly correlated in order to reduce portfolio risk. It smoothes out the variation of returns and reduces the variability. Much of the total risk is diversifiable. But not all risks can be eliminated via diversification. Unsystematic risk (that which relates uniquely to the security or issuing firm) can be substantially reduced with a large, well-diversified portfolio. Still some risks remain which affect all firms to some degree (e.g. business cycles and interest rate changes). This is the market or systematic risk.Mathematically, a security’s return is compos ed of: R =βrm + e where, beta is a market sensitivity index, indicating how sensitive the security return is to changes in the market level. The unsystematic return is independent of the market return and is represented by the epsilon e. The systematic risk of a security is equal to β times the standard deviation of the market return. The unsystematic risk equals the standard deviation of the residual return factor. Portfolio systematic risk is equal to the portfolio beta factor times the risk of the market index. The portfolio beta factor is simply the average of the individual security betas, weighted by the proportion of each security in the portfolio.The Risk of Individual SecuritiesThe systematic risk of an individual security is that portion of its total risk that cannot be eliminated by combining it with other securities in a well diversified portfolio. Thus, we have: Security Return = Systematic Return + Unsystematic ReturnThe security return may be expressed as:R = β R M + ε where ε is unsystematic returnThe security return model is usually written in such a way that the average value of the unsystematic return is zero. This is accomplished by adding a factor alphaαto the model to represent the average value of the unsystematic returns over time.R = α + β R M + ε where ε is unsystematic returnThis model for security returns is referred to as the market model.Estimating BetaBeta can be estimated by regressing returns of a security on the returns of a market portfolio. Since historical data are employed the beta computed will vary with the time period used, number of observations, and market index employed. Thus a question may be raised about the stability of beta over time.THE CAPITAL ASSET PRICING MODELThe capital asset pricing model (CAPM) asserts that the expected return on a portfolio should exceed the risk-less rate of return by an amount that is proportional to the portfolio beta. The relationship between expected return and risk should be linear.Underlying AssumptionsThe model contains several critical assumptions: (1) investors are risk-averse; (2) investors have common time horizon; (3) investors have homogeneous expectations; (4) perfect markets exist, with no transactions costs and borrowing rates are equal to lending rates.Tests of the CAPMOne major difficulty in testing the CAPM is that the model is stated in terms of investor expectations and not in terms of required returns. Yet a number of tests have been tried, the results suggesting that there is indeed a linear risk/return relationship. More noted is Roll’s critique which states while the CAPM is testable in principle, no correct test of the theory has yet been presented. There is only one potentially testable hypothesis, namely that the true market portfolio is mean-variance efficient. Because the true market portfolio must contain all worldwide assets, the value of most of which cannot be observed, the hypothesis is in all probability untestable.THE MULTIFACTOR CAPMThe CAPM assumes the only risk is uncertainty about future market prices. But Robert Merton suggests that there exist extra-market sources of risk of concern to investors as well, such as future income, inflation, future investment opportunities. These risks affect ability to consume goods and to invest in securities in the future. Thus Merton has developed a “multifactor CAPM” to incorporate these extra-market risks in the model. In essence a security’s return has a Beta sensitivity to several factors. What these precise factors are and how many, however, has not been established. Thus this model is even harder to test than the straight CAPM.ARBITRAGE PRICING THEORY MODELDeveloped by Stephen Ross, the arbitrage pricing model (APT) assumes that there are several factors that determine the rate of return on a security, not just one as in the case of the CAPM. Rather, a security’s return is linearly related to “H” factors, but what they are is not specified. It is like the multifactor CAPM but distinguished from it in that it does not require a market index or standard deviation of returns.Empirical EvidenceEmpirical work suggests the following four plausible factors:1. unanticipated changes in industrial production;2. unanticipated changes in the spread between the yield on low grade and high grade bonds;3. unanticipated changes in interest rates and the shape of the yield curve;4. unanticipated changes in inflation.ATTACKS ON THE THEORYPortfolio theory is a normative theory. It describes how investors should behave. However, a number of positive theories have challenged portfolio theory by showing disparities between how investors should behave and how they actually behave.Asset Return Distribution and Risk MeasuresThere is empirical evidence to suggest that the probability distribution of returns is not normal, but is skewed. This means that between periods when the market exhibits relatively modest changes in returns, there will be periods when there are changes that are much higher (i.e., crashes and bubbles) than the normal distribution predicts.Assault by the Behavioral Finance Theory CampBehavioral finance looks at how psychology affects investor decisions and the implications not only for portfolio theory but also asset pricing theory and market efficiency. There are three themes in the behavioral finance literature: (1) investors err in making investment decisions because they rely on rules of thumb, (2) investors are influenced by form as well as substance in making investment decisions, (3) prices in the financial market are affected by errors and decision frames.The first theme involves heuristics, a term meaning a rule of thumb strategy to follow in order to shorten the time it takes to make a decision. There are circumstances where heuristics can workfairly well. But it can also lead to cognitive biases, or heuristic-driven biases.The second theme involves the concept of framing, meaning the way in which a situation or choice is presented to an investor can drive results. For example, investors often fail to treat the value of their stock portfolio at market value. Instead, they have a “mental account” where they continue to market the value of each stock in their portfolio at the purchase price despite the change in the market value.The third them of behavioral finance involves how errors caused by heuristics and framing dependence affect the pricing of assets.ANSWERS TO QUESTIONS FOR CHAPTER 12(Questions are in bold print followed by answers.)1. A friend has asked you to help him figure out a statement he received from his broker. It seems that, at the start of last year, your friend paid $900 for a bond, and sold it at the end of the year for $890. During the year, he received a single coupon payment of $110. The statement claims that his return (not including commissions and taxes) is 11.11% for the year. Is this claim correct?Returns can be measured by taking all the cash flows (interest payments and capital gains) and dividing by the cost of the security. The formula is:R=(I+P1-P0)/P0=$110+$890-$900/$900=11.11%,so the statement is correct.2. Suppose the probability distribution for the one-period return of some asset is as follows:Return Probability0.20 0.100.15 0.200.10 0.300.03 0.25-0.06 0.15a. W hat is this asset’s expected one-period return?b. What is this asset’s variance and standard deviation for the one-period return?a.The expected return for the asset is:(0.20) (0.10) + (0.15) (0.20) + (0.10) (0.30) + (0.03) (0.25) + (-0.06) (0.15) = 7.85%b.The asset’s return variance is:(0.10) [0.20-0.0785]2+(0.20) [0.15-0.0785]2+(0.30) [0.10-0.0785]2+(0.25) [0.03-0.0785]2+(0.15) [(-0.06) -0.0785] 2=0.006102.The square root of the variance is the standard deviation. Hence, the standard deviation is 0.07812.3. “A portfolio’s expected return and variance of return are simply the weighted average of the expected return and variance of the individual assets.” Do you agree with this statement?This statement is only partially correct. A portfolio’s expe cted return is a weighted average of the expected return of the assets comprising the portfolio. But the portfolio variance is not because it also depends on the correlation (covariance) of the asset returns.4. In the January 25, 1991, issue of The Value Line Investment Survey, you note the following:Company Beta (β)IBM 0.95Bally Manufacturing 1.40Cigna Corporation 1.00British Telecom 0.60a.How do you interpret these betas?b.Is it reasonable to assume that the expected return on British Telecom is less thanthat on IBM shares?c.“Given that Cigna Corporation has a β of 1.00, one can mimic the performance ofthe stock market as a whole by buying only these shares.” Do you agree with thisstatement?a.These figures represent the systematic risk of these stocks; how the stock’s return shouldmove relative to a market index return.b.According to the CAPM, the higher the beta, the greater the expected return. So, accordingtot he reported values for beta, the expected return for British Telecom is less than for IBM.c.This statement is not true. Investing in only these shares will still expose the investor to muchunsystematic risk, which can only be diversified away by investing in a portfolio of different securities.5. Assume the following:Expected market return = 15%Risk-free rate = 5.7%If a security’s beta is 1.3, what is its expected return according to the CAPM?The expected return is:.07+1.3 (.15-.07) =.174=17.4%, (assume risk free rate =7%).6. Professor Harry Markowitz, corecipient of the 1990 Nobel Prize in Economics, wrote the following:A portfolio with sixty different railway securities, for example, wouldnot be as well diversified as the same size portfolio with some railroad,some public utility, mining, various sorts of manufacturing, etc.Why is this true?This is true because railway securities are likely to be highly correlated with each other, whereas a well-diversified portfolio of issues from different industries leads to elimination of unsystematic risk.7. Following is an excerpt from an article, “Risk and Reward,” in The Economist of October 20, 1990:Next question: is the CAPM supported by the facts? That iscontroversial, to put it mildly. It is a tribute to Mr. Sharpe [cowinnerof the 1990 Nobel Prize in Economics] that his work, which dates fromthe early 1960s, is still argued over so heatedly. Attention has latelyturned away from beta to more complicated ways of carving up risk.But the significance of CAPM for financial economics would be hardto exaggerate.a.Summarize Roll’s argument on the problems inherent in empirically verifying theCAPM.b.What are some of the other “more complicated ways of carving up risk”?a.Roll argues that while the CAPM is testable in principle, no correct test of the theory has yetbeen presented. He also argues that there is practically no possibility that a correct test will be done because there is only one potentially testable hypothesis associated with the CAPM, namely that the true market portfolio is mean-variance efficient. Since this portfolio must contain all worldwide assets, the value of most of which cannot be observed, the hypothesis is probably untestable.b.CAPM assumes investors are only concerned with one risk -- the future prices of their assets.Merton asserts that there are other investor concerns, such as the ability to consume goods and services in the future. He has tried to incorporate more than one risk factor in his model.8.a.What are the difficulties in practice of applying the arbitrage pricing theory model?b.Does Roll’s criticism also apply to this pricing model?c.“In the CAPM investors should be compensated for accepting systematic risk: forthe APT model, investors are rewarded for accepting both systematic risk andunsystematic risk.” Do you agree with this statement?a.The difficulty lies in identifying the systematic factors.b.Roll’s criticism does not apply to the APT model because that model does not rely on a truemarket index.c.This statement is true for the CAPM, but not for the APT model. The latter also asserts thatinvestors should be compensated only for accepting systematic risk. But unlike the CAPM, there is more than one systematic risk.9.a.What does it mean that a return distribution has a fat tail?b.What is the implication if a return distribution is assumed to be normallydistributed but is in fact a fat-tailed distribution?a.Probability distributions are not normal, but are instead skewed. The tails of the distributionare more likely than predicted by a normal probability distribution.b.The implication is that between periods when the market exhibits relatively modest changesin returns, there will be periods when there are changes that are much higher (i.e., crashes and bubbles) than the normal distribution predicts.10. How does the behavioral finance approach differ from the standard finance theory approach?Standard financial theory assumes investors are rational utility maximizers. Behavioral finance theory challenges this assumption. It argues that investors are systematically subject to cognitive biases and errors. They make decisions based on mental shortcuts, called heuristics, and these shortcuts are not necessarily consistent with rational wealth maximizing behavior as predicted by the standard finance theory.。
fabozzi_金融市场与金融机构基础课后答案.doc
CHAPTER 4THE U.S. FEDERAL RESERVEAND THE CREATION OF MONEYCENTRAL BANKS AND THEIR PURPOSEThe primary role of a central bank is to maintain the stability of the currency and money supply for a country or a group of countries. The role of central banks can be categorized as: (1) risk assessment, (2) risk reduction, (3) oversight of payment systems, (4) crisis management.One of the major ways a central bank accomplishes its goals is through monetary policy. For this reason, central banks are sometimes called monetary authority. In implementing monetary policy, central banks, acting as a reserve bank, require private banks to maintain and deposit the required reserves with the central bank. In times of financial crisis, central banks perform the role of lender of last resort for the banking system. Countries throughout the world may have central banks. Additionally, the European Central Bank is responsible for implementing monetary policy for the member countries of the European Union.There is widespread agreement that central banks should be independent of the government so that decisions of the central bank will not be influenced for short-term political purposes such as pursuing a monetary policy to expand the economy but at the expense of inflation.In implementing monetary and economic policies, the United States is a member of an informal network of nations. This group started in 1976 as the Group of 6, or G6: US, France, Germany, UK, Italy, and Japan. Thereafter, Canada joined to for the G7. In 1998, Russia joined to form the G8.THE CENTRAL BANK OF THE UNITED STATES: THE FEDERAL RESERVE SYSTEMThe Federal Reserve System consists of 12 banking districts covering the entire country. Created in 1913, the Federal Reserve is the government agency responsible for the management of the US monetary and banking systems. It is independent of the political branches of government. The Fed is managed by a seven-member Board of Governors, who are appointed by the President and approved by Congress.The Fed's tools for monetary management have been made more difficult by financial innovations. The public's increasing acceptance of money market mutual funds has funneled a large amount of money into what are essentially interest-bearing checking accounts. Securitization permits commercial banks to change what once were illiquid consumer loans of several varieties into securities. Selling these securities gives the banks a source of funding that is outside the Fed's influence.INSTRUMENT OF MONETARY POLICY: HOW THE FED INFLUENCES THE SUPPLY OF MONEYThe Fed has three instruments at its disposal to affect the level of reserves.Reserve RequirementsUnder our fractional reserve banking system have to maintain specified fractional amounts of reserves against their deposits. The Fed can raise or lower these required reserve ratios, thereby permitting banks to decrease or increase their lending and investment portfolios. A bank's total reserves equal its required reserves plus any excess reserves.Open Market OperationsThe Fed's most powerful instrument is its authority to conduct open market operation. It buys and sells in open debt markets government securities for its own accounts. The Fed prefers to use Treasury bills because it can make its substantial transactions without seriously disrupting the prices or yields of bills.The Federal Open Market Committee, or FOMC, is the unit that decides on the general issues of changing the rate of growth in the money supply, by open market sales or purchases of securities. The implementation of policy through open market operations is the responsibility of the trading desk of the Federal Reserve Bank of New York.Open Market Repurchase AgreementsThe Fed often employs variants of simple open market purchases and sales, these are called the repurchase agreement (or repo) and the reverse repo. In a repo, the Fed buys a particular amount of securities from a seller that agrees to repurchase the same number of securities for a higher price at some future time. In a reverse repo, the Fed sells securities and makes a commitment to buy them back at a higher price later.Discount RateA bank borrowing from the Fed is said to use the discount window. The discount rate is the rate charged to banks borrowing directly from the Fed. Raising the rate is designed to discourage such borrowing, while lowering should have the opposite effect.DIFFERENT KINDS OF MONEYMoney is that item which serves as a numeraire. In a basic sense money can be defined as anything that serves as a unit of account and medium of exchange. We measure prices in dollars and exchange dollars for goods. Hence coins, currency, and any items readily exchanged into dollars (checking deposits or NOW accounts) constitute our money supply.MONEY AND MONETARY AGGREGATESMonetary aggregates measure the amount of money available to the economy at any time. The monetary base is defined as currency in circulation (coins and federal reserve notes) and reserves in the banking system. The instruments that serve as a medium of exchange can be narrowly defined as Mi, which is currency and demand deposits. M2 is Mi plus time and savings accounts, and money market mutual funds. Finally, M3 is M? plus short-term Treasury liabilities. While all three aggregates are watched and monitored, Mi is the most common form of the money supply, with its trait as being the most liquid. The ratio of the money supply to the economy's income is known as the velocity of money.THE MONEY MULTIPIER: THE EXPANSION OF THE MONEY SUPPLYThe money multiplier effect arises from the fact that a small change in reserves can produce a large change in the money supply. Through our fractional reserve system, a small increase will allow an individual bank, to lend out the greater part of these additional funds. These loans subsequently become deposits in other banks allowing them to expand proportionately. So, while one bank can expand its loans (or deposits) by an amount 1% of reserves required, all banks in the system can do likewise. Thus, in a simple format total change in deposits can be stated as change in reserves divided by the reserve requirement, which is also the formula for perpetuity. For example, if the change in the level of reserves is $100 and the reserve requirement is 20%, the change in total deposits will be $500 for a multiplier of 5. Of course, major assumptions are that banks will fully loan out their excess reserves and that depositors will not withdraw any of these extra reserves. THE IMPACT OF INTEREST RATES ON THE MONEY SUPPLYHigh rates of interest may make keeping excess reserves costly, since unused funds represent loans not made and interest not earned. High rates of interest will also affect the public's demand for holding cash. If deposits pay competitive interest rates, customers will be more willing to hold such bank liabilities and less cash. Therefore, a higher rate of interest can actually spur growth of the money supply. More likely, however, it will deter borrowing and slow monetary growth.THE MONEY SUPPLY PROCESS IN AN OPEN ECONOMYIn the modern era, almost every country has an open economy. Foreign commercial and central banks hold dollar accounts in the United States. Their purchases and sales of these deposits can affect exchange rates of the dollar against their own currency. The Fed has responsibility for maintaining stability in exchange rates. A purchase of foreign exchange with dollars depreciates the dollar's value, but it also adds dollars to the accounts of foreign banks in this country, thus adding to the U.S. monetary base. Most central banks of large economies own or stand ready to own a large amount of each of the world's major currencies, which are considered international reserves. Sales of foreign exchange transactions have monetary base implication and hence consequences for the domestic money supply, emphasis is given to coordinating monetarypolicies among developed nations.ANSWERS TO QUESTIONS FOR CHAPTER 4(Questions are in bold print followed by answers.)1.What is the role of a central bank?The role of a central bank has several functions: risk assessment, risk reduction, oversight of payment systems, and crisis management. It can do this through monetary policies, and through the implementation of regulations.2.Why is it argued that a central bank should be independent of the government?Central banks should be independent of the short-term political interests and political influences generally in setting economic policies.3.Identify each participant and its role in the process by which the money supply changes and monetary policy is implemented.The Fed determines monetary policy and seeks to implement it through changes in reserves. It is up to the nation's banking system to act on changes in reserves thereby affecting deposits, which constitute the greater part of the M| definition of the money supply.4.Describe the structure of the board of governors of the Federal Reserve System.The Board of Governors of the Federal Reserve System consists of 7 members who are appointed to staggered 14-year terms. The Board reviews discount operations and sets legal reserve requirements. In addition, all 7 members of the Board serve on the Federal Open Market Committee (FOMC), which determines the direction and magnitude of open-market operations. Such operations constitute the key instrument for implementing monetary policy.5.a・ Explain what is meant by the statement "the United States has a fractional reserve banking system."b. How are these items related: total reserves, required reserves, and excess reserves?a. A fractional reserve system requires that a fraction or percent of a bank's reserve be placedeither in currency in vault or with the Federal Reserve System.b.Total reserves are the amounts that banks hold in cash or at the Fed. Required reserves areamounts required by the Fed to meet some specific or legal reserve ratio to deposits. Excess reserves are bank reserves in currency and at the Fed which are in excess of legal requirements.Since these amounts are non-interest bearing, banks are often willing to lend these surplus funds to deficit banks at the Fed funds rate.5.What is the required reserve ratio, and how has the 1980 Depository Institutions Deregulation and Monetary Control Act constrained the Fed's control over the ratio?The required reserve ratio is the fraction of deposits a bank must hold as reserves. The DIDMCA constrained the Fed's control over the ratio by letting Congress set ranges of reserves for demand and time deposits.6.In what two forms can a bank hold its required reserves?A bank can hold its reserves in the form of currency in vault or in deposit at the Fed.8.a.What is an open market purchase by the Fed?b.Which unit of the Fed decides on open market policy, and what unit implements thatpolicy?c.What is the immediate consequence of an open market purchase?a.An open market purchase by the Fed consists of the purchase of U.S. Treasury securities.b.The FOMC decides on open market policy and directs the Federal Reserve Bank of New Yorkto implement it through sales and purchases of these securities.c.The immediate consequence of an open market purchase is to supply the seller of the securitywith a check on the Federal Reserve System that he can deposit in his bank, therebyimmediately increasing the excess reserves and thus nation's money supply.7.Distinguish between an open market sale and a matched sale (which is the same as a matched sale-purchase transaction or a reverse repurchase agreement).A matched sale or reverse repo involves the sale of a Treasury security with an agreement to buy it back at a later date and at a higher price as the cost for borrowing the funds. This contrasts with an outright sale at some discounted or premium price.8.What is the discount rate, and to what type of action by a bank does it apply?The discount rate is the rate a bank pays to borrow a t the "discount window” of the Fed. Such borrowings are often undertaken to meet temporary liquidity needs. Bank needs are monitored and the Fed likes to state that borrowing from it is a "privilege and not a right.”IL Define the monetary base and M2The monetary base includes total bank reserves plus currency in the hands of the public. M2 = Mi (currency and demand deposits) + savings and time deposits.12.Describe the basic features of the money multiplier.The money multiplier is crucial to the concept of money creation and is analogous to the idea of the autonomous spending multiplier and formula for a perpetuity. It is the inverse of the required reserve ratio (1/rr). If the reserve ratio is .2 then the money supply will expand five times any increase in new deposits. The multiplier will be less if banks hold excess reserves or experience cash drains.13.Suppose the Fed were to inject $100 million of reserves into the banking system by an open market purchase of Treasury bills. If the required reserve ratio were 10%, what is the maximum increase in Mi that the new reserves would generate? Assume that banks make all the loans their reserves allow, that firms and individuals keep all their liquid assets in depository accounts, and no money is in the form of currency.The maximum increase in Mi will be $1 billion assuming no cash drains in the system, and banks are fully loaned up.14.Assume the situation from question 13, except now assume that banks hold a ratio of0.5% of excess reserves to deposits and the public keeps 20% of its liquid assets in the form of cash. Under these conditions, what is the money multiplier? Explain why this value of the multiplier is so much lower than the multiplier from question 13.Substitute the given values of currency ratio, required reserves ratio, and excess reserves ratio of 20%, 10% and 0.5% respectively into the formula given on page 94 of the textbook. Now we have a lower multiplier value of 3.9=1.20A 305. This is because public and banks do not deposit or lend, all they can.。
金融市场与金融机构基础-Fabozzi-Chapter14
Foundations of Financial Markets and Institutions, 4e (Fabozzi/Modigliani/Jones)Chapter 14 Secondary MarketsMultiple Choice Questions1 Function of Secondary Markets1) The key distinction between a primary market and a secondary market is that, in the secondary market, ________.A) funds flow from the seller of the asset to the buyer.B) the issuer of the asset receives funds from the buyer.C) funds flow from the buyer of the asset to the seller.D) the existing issue changes hands in the primary market.Answer: CComment: The key distinction between a primary market and a secondary market is that, in the secondary market, the issuer of the asset does not receive funds from the buyer. Rather, the existing issue changes hands in the secondary market, and funds flow from the buyer of the asset to the seller.Diff: 2Topic: 14.1 Function of Secondary MarketsObjective: 14.1 the definition of a secondary market2) Without a secondary market, issuers would be unable to ________, or they would have to paya higher rate of return, as investors would ________ in compensation for expected illiquidity in the securities.A) sell new securities; increase the discount rateB) sell new securities; decrease the discount rateC) buy new securities; decrease the priceD) sell new securities; increase the priceAnswer: ADiff: 2Topic: 14.1 Function of Secondary MarketsObjective: 14.12 the implications of pricing efficiency for market participants3) Investors in financial assets receive ________.A) illiquidity for their assets.B) information about the assets' fair or consensus values.C) increased the costs of searching for likely buyers and sellers of assets.D) the disadvantage of higher transaction costs.Answer: BComment: Investors in financial assets receive several benefits from a secondary market. Such a market obviously offers them liquidity for their assets as well as information about the assets’ fair or consensus values. Furthermore, secondary markets bring together many interested parties and thereby reduce the costs of searching for likely buyers and sellers of assets. Moreover, by accommodating many trades, secondary markets keep the cost of transactions low. By keeping the costs of both searching and transacting low, secondary markets encourage investors to purchase financial assets.Diff: 2Topic: 14.1 Function of Secondary MarketsObjective: 14.12 the implications of pricing efficiency for market participants2 Trading Locations1) One indication of the usefulness of secondary markets is that they exist throughout ________.A) the United States.B) Europe and Asia.C) each state.D) the world.Answer: DDiff: 1Topic: 14.2 Trading LocationsObjective: 14.2 the need for secondary markets for financial assets2) In the United States, secondary trading of common stock occurs ________.A) in a number of trading locations.B) in Dallas, Texas.C) in each major city.D) None of theseAnswer: ADiff: 1Topic: 14.2 Trading LocationsObjective: 14.2 the need for secondary markets for financial assets3) Which of the below statements is TRUE?A) In the United States, secondary shares are traded on major national stock exchanges (the largest of which is the American Stock Exchange) and regional stock exchanges.B) In the United States, significant trading in stock takes place on the so-called over-the-counter or OTC market, which involves specific geographical locations.C) In the United States, the dominant OTC market for stocks in the United States is the New York Stock Exchange.D) In the United States, some bonds are traded on exchanges, but most trading in bonds in the United States and throughout the world occurs in the OTC market.Answer: DComment: In the United States, secondary trading of common stock occurs in a number of trading locations. Many shares are traded on major national stock exchanges (the largest of which is the New York Stock Exchange) and regional stock exchanges, which are organized and somewhat regulated markets in specific geographical locations. Additional significant trading in stock takes place on the so-called over-the-counter or OTC market, which is a geographically dispersed group of traders linked to one another via telecommunication systems. The dominant OTC market for stocks in the United States is Nasdaq. Some bonds are traded on exchanges, but most trading in bonds in the United States and throughout the world occurs in the OTC market.Diff: 2Topic: 14.2 Trading LocationsObjective: 14.2 the need for secondary markets for financial assets3 Market Structures1) In a continuous market, prices may vary ________.A) because of the basic situation of supply and demand.B) are determined discontinuously throughout the trading day.C) are determined continuously throughout the trading day even if buyers and sellers are not submitting orders.D) with the pattern of orders reaching the market.Answer: DComment: Many secondary markets are continuous, which means that prices are determined continuously throughout the trading day as buyers and sellers submit orders. For example, given the order flow at 10:00 A.M., the market clearing price of a stock on some organized stock exchange may be $70; at 11:00 A.M. of the same trading day, the market-clearing price of the same stock, but with different order flows, may be $70.75. Thus, in a continuous market, prices may vary with the pattern of orders reaching the market and not because of any change in the basic situation of supply and demand.Diff: 2Topic: 14.3 Market StructuresObjective: 14.3 the difference between a continuous and a call market2) ________, orders are grouped together for simultaneous execution at the same price.A) In a bull marketB) In an efficient marketC) In a call marketD) In a bear marketAnswer: CDiff: 2Topic: 14.3 Market StructuresObjective: 14.3 the difference between a continuous and a call market3) Which of the below statements is FALSE?A) In a call market, a market maker holds an auction for a stock at certain times in the trading day (or possibly more than once in a day).B) Many secondary markets are continuous, which means that prices are determined continuously throughout the trading day as buyers and sellers submit orders.C) In a call market, a market maker holds an auction for a stock at the same time each day.D) An auction in a call market may be oral or written.Answer: CComment: In a call market, a market maker holds an auction for a stock at certain times in the trading day (or possibly more than once in a day).Diff: 2Topic: 14.3 Market StructuresObjective: 14.3 the difference between a continuous and a call market4 Perfect Markets1) Perfect market results when ________.A) the number of buyers and sellers is sufficiently small, and all participants are small enough relative to the market so that no individual market agent can influence the commodity's price. B) the number of buyers and sellers is sufficiently large, and all participants are small enough relative to the market so that all individual market agent can influence the commodity's price. C) the number of buyers and sellers is sufficiently large, and all participants are small enough relative to the market so that no individual market agent can influence the commodity's price. D) the number of buyers and sellers is sufficiently small, and all participants are small enough relative to the market so that all individual market agent can influence the commodity's price. Answer: CComment: In general, a perfect market results when the number of buyers and sellers is sufficiently large, and all participants are small enough relative to the market so that no individual market agent can influence the commodity’s price.Diff: 2Topic: 14.4 Perfect MarketsObjective: 14.4 the requirements of a perfect market2) A perfect market results when all buyers and sellers are ________, and the market price is determined where there is ________.A) price-takers; equality of supply and demand.B) price-makers; equality of supply and demand.C) price-takers; inequality of supply and demand.D) price-makers; inequality of supply and demand.Answer: ADiff: 2Topic: 14.4 Perfect MarketsObjective: 14.4 the requirements of a perfect market3) A market is not perfect only because market agents are price takers but is also free of transactions costs and any impediment to the interaction of supply and demand for the commodity. Economists refer to these various costs and impediments as frictions. Frictions include ________.A) bid-ask spreads charged by dealers and order handling and clearance charges.B) taxes (but not on capital gains) and government-imposed transfer fees.C) costs of acquiring information about the financial asset and restrictions on market takers.D) financial liability that a buyer or seller may take and taxes on capital gains.Answer: AComment: A market is not perfect only because market agents are price takers. A perfect market is also free of transactions costs and any impediment to the interaction of supply and demand for the commodity. Economists refer to these various costs and impediments as frictions. The costs associated with frictions generally result in buyers paying more than in the absence of frictions and/or in sellers receiving less commissions charged by brokers. Frictions include: bid—ask spreads charged by dealers.order handling and clearance charges.taxes (notably on capital gains) and government-imposed transfer fees.costs of acquiring information about the financial asset.trading restrictions, such as exchange-imposed restrictions on the size of a position in the financial asset that a buyer or seller may take.restrictions on market makers.halts to trading that may be imposed by regulators where the financial asset is traded.Diff: 2Topic: 14.4 Perfect MarketsObjective: 14.4 the requirements of a perfect market4) This practice of selling securities that are not owned at the time of sale is referred to as________.A) buying short.B) selling short.C) selling long.D) buying and selling simultaneously.Answer: BDiff: 2Topic: 14.4 Perfect MarketsObjective: 14.4 the requirements of a perfect market5) In the absence of an effective short-selling mechanism, security prices will tend to be biased toward the ________, causing a market to depart from the standards of a perfect price-setting situation.A) view of more pessimistic investorsB) view of the market makerC) view of more optimistic investorsD) view of the market takerAnswer: CDiff: 2Topic: 14.4 Perfect MarketsObjective: 14.4 the requirements of a perfect market5 Role of Brokers and Dealers in Real markets1) ________ are necessary to the smooth functioning of a secondary market.A) Inexperienced investorsB) Initial public offeringsC) Investment bankersD) Brokers and dealersAnswer: DDiff: 2Topic: 14.5 Role of Brokers and Dealers in Real MarketsObjective: 14.6 why brokers are necessary2) Investors need brokers to help ________.A) execute their orders.B) find other parties wishing to sell or buy.C) negotiate for good prices.D) All of theseAnswer: DComment: Investors need brokers to receive and keep track of their orders for buying or selling, to find other parties wishing to sell or buy, to negotiate for good prices, to serve as a focal point for trading, and to execute the orders.Diff: 1Topic: 14.5 Role of Brokers and Dealers in Real MarketsObjective: 14.6 why brokers are necessary3) Which of the following statements is FALSE?A) It is important to realize that the brokerage activity requires the broker to buy and sell or hold in inventory the financial asset that is the subject of the trade.B) A broker is an entity that acts on behalf of an investor who wishes to execute orders. In economic and legal terms, a broker is said to be an agent of the investor.C) The broker receives, transmits, and executes investors' orders with other investors.D) Services provided by brokers include research, recordkeeping, and advising.Answer: AComment: It is important to realize that the brokerage activity does not require the broker to buy and sell or hold in inventory the financial asset that is the subject of the trade.Diff: 2Topic: 14.5 Role of Brokers and Dealers in Real MarketsObjective: 14.6 why brokers are necessary4) Which of the following statements is FALSE?A) A real market might also differ from the perfect market because of the possibly frequent event of a temporary imbalance in the number of buy and sell orders that investors may place for any security at any one time.B) An unmatched or unbalanced flow of buy and sell orders causes a problem in that the security's price may change abruptly, even if there has been no shift in either supply or demand for the security.C) The fact of imbalances in buy and sell orders cannot explain the need for the dealer or market maker, who stands ready and willing to buy a financial asset for its own account (to add to an inventory of the financial asset) or sell from its own account (to reduce the inventory of the financial asset).D) An unmatched or unbalanced flow of buy and sell orders causes a problem in that buyers may have to pay higher than market-clearing prices (or sellers accept lower ones) if they want to make their trade immediately.Answer: CComment: The fact of imbalances in buy and sell orders explains the need for the dealer or market maker, who stands ready and willing to buy a financial asset for its own account (to add to an inventory of the financial asset) or sell from its own account (to reduce the inventory of the financial asset).Diff: 3Topic: 14.5 Role of Brokers and Dealers in Real MarketsObjective: 14.7 the role of a dealer as a market maker and the costs associated with market making5) The ________ can be viewed as the price charged by dealers for supplying immediacy together with short-run price stability (continuity or smoothness) in the presence of short-term order imbalances.A) bid-ask feeB) bid-ask priceC) bid-ask spreadD) bid-ask imbalanceAnswer: CDiff: 1Topic: 14.5 Role of Brokers and Dealers in Real MarketsObjective: 14.7 the role of a dealer as a market maker and the costs associated with market making6) By taking the opposite side of a trade when there are no other orders, the dealer prevents the price from ________ from the price at which a recent trade was consummated.A) materially convergingB) materially divergingC) immaterially concurringD) immaterially divergingAnswer: BDiff: 1Topic: 14.5 Role of Brokers and Dealers in Real MarketsObjective: 14.7 the role of a dealer as a market maker and the costs associated with market making7) Dealers also have to be compensated for bearing risk. A dealer's position may involve carrying inventory of a security (a long position) or selling a security that is not in inventory (a short position). There are three types of risks associated with maintaining a long or short position in a given security. Two of these include ________.A) the risk of trading with someone who has inferior information and the expected time it will take the dealer to unwind a position and its uncertainty.B) the uncertainty about the future price of the security and the expected time it will take the dealer to unwind a position and its uncertainty.C) the risk of trading with someone who has inferior information and the uncertainty about the future price of the security.D) the certainty about the future price of the security and the expected time it will take the dealer to unwind a position and its uncertainty.Answer: BComment: First, there is the uncertainty about the future price of the security. A dealer who has a net long position in the security is concerned that the price will decline in the future; a dealer who is in a net short position is concerned that the price will rise. The second type of risk has to do with the expected time it will take the dealer to unwind a position and its uncertainty. And this, in turn, depends primarily on the thickness of the market for the security. Finally, while a dealer may have access to better information about order flows than the general public, there are some trades where the dealer takes the risk of trading with someone who has better information. This results in the better-informed trader obtaining a better price at the expense of the dealer. Consequently, a dealer in establishing the bid-ask spread for a trade will assess whether or not the trader might have better information.Diff: 2Topic: 14.5 Role of Brokers and Dealers in Real MarketsObjective: 14.7 the role of a dealer as a market maker and the costs associated with market making6 Market Efficiency1) In ________, investors can obtain transaction services as cheaply as possible, given the costs associated with furnishing those services.A) an internally inefficient marketB) an externally efficient marketC) a pricing efficient marketD) an operationally efficient marketAnswer: DDiff: 2Topic: 14.6 Market EfficiencyObjective: 14.8 what is meant by the operational efficiency of a market2) In its "Big Bang" of 1986, the London Stock Exchange ________.A) abolished fixed brokerage commissions.B) abolished competitive brokerage commissions.C) adopted fixed brokerage commissions.D) shot down all types of brokerage commissions.Answer: ADiff: 2Topic: 14.6 Market EfficiencyObjective: 14.8 what is meant by the operational efficiency of a market3) Effective August 24, 2000, the minimum spread was reduced to ________ ("decimals"), with trades on all stocks in decimals beginning on August 9, 2001.A) one-eighthB) one-sixteenthC) one centD) two centsAnswer: CDiff: 2Topic: 14.6 Market EfficiencyObjective: 14.8 what is meant by the operational efficiency of a market4) ________ refers to a market where prices at all times fully reflect all available information that is relevant to the valuation of securities.A) Internal inefficiencyB) External efficiencyC) Operational efficiencyD) Pricing efficiencyAnswer: DDiff: 2Topic: 14.6 Market EfficiencyObjective: 14.9 what is meant by the pricing efficiency of a market5) Which of the below statements is TRUE?A) In a passive strategy, investors seek to capitalize on what they perceive to be the mispricing of a security or securities.B) In a market that is price efficient, active strategies will not consistently generate a return after ignoring transactions costs and the risks associated with a strategy of frequent trading.C) In a market which seems to be price efficient, one investment strategy is simply to buy and hold a broad cross section of securities in the marketD) Matching in an investment strategy that has the goal of matching the performance of some financial index from the market.Answer: CComment: A price efficient market has implications for the investment strategy that investors may wish to pursue. In an active strategy, investors seek to capitalize on what they perceive to be the mispricing of a security or securities. In a market that is price efficient, active strategies will not consistently generate a return after taking into consideration transactions costs and the risks associated with a strategy of frequent trading. The other strategy, in a market which seems to be price efficient, is simply to buy and hold a broad cross section of securities in the market. Some investors pursue this strategy through indexing, which is a policy that has the goal of matching the performance of some financial index from the market.Diff: 2Topic: 14.6 Market EfficiencyObjective: 14.10 the implications of pricing efficiency7 Electronic Trading1) Because the bond business has been ________ rather than ________ business, the capital of the market makers is critical.A) a financial; an accountingB) an accounting; a financialC) an agency; a principalD) a principal; an agencyAnswer: DDiff: 2Topic: 14.7 Electronic TradingObjective: 14.5 frictions that cause actual financial markets to differ from a perfect market2) There are several related reasons for the transition to the electronic trading of bonds. Which of the below reasons is NOT one of these?A) The profitability of bond market making has declined since many of the products have become less commodity-like.B) The increase in the volatility of bond markets has increased the capital required of bond broker-dealers.C) Making markets in bonds has become more risky for the market makers because the size of the orders has increased tremendously.D) The profitability of bond market making has declined and their bid-offer spreads have decreased.Answer: AComment: The profitability of bond market making has declined since many of the products have become more commodity-like and their bid-offer spreads have decreased.Diff: 2Topic: 14.7 Electronic TradingObjective: 14.7 the role of a dealer as a market maker and the costs associated with market making3) The same Wall Street firms that have been the major market makers in bonds have also been the ________ of electronic trading in bonds.A) cynicsB) attackersC) supportersD) detractorsAnswer: CDiff: 2Topic: 14.7 Electronic TradingObjective: 14.7 the role of a dealer as a market maker and the costs associated with market making4) There are a variety of types of electronic trading systems for bonds. The two major types of electronic trading systems are ________.A) the customer-to-dealer systems and the exchange systems.B) the dealer-to-customer systems and the leverage systems.C) the broker-to-dealer systems and the exchange systems.D) the dealer-to-customer systems and the exchange systems.Answer: DDiff: 2Topic: 14.7 Electronic TradingObjective: 14.7 the role of a dealer as a market maker and the costs associated with market making5) Which of the below statement is FALSE?A) The multi-customer system simply computerizes the traditional customer-dealer market making mechanism.B) Single-dealer systems are based on a customer dealing with a single, identified dealer over the computer.C) Dealer-to-customer systems can be a single-dealer system or multiple-dealer system.D) Multi-dealer systems provide some advancement over the single- dealer method since a customer can select from any of several identified dealers whose bids and offers are provided on a computer screen.Answer: AComment: The single-dealer system simply computerizes the traditional customer-dealer market making mechanism.Diff: 2Topic: 14.7 Electronic TradingObjective: 14.7 the role of a dealer as a market maker and the costs associated with market making6) Among the overall advantages of electronic trading are ________.A) providing liquidity to the government.B) price discovery (particularly for less liquid markets).C) utilization of old technologies.D) trading and portfolio management inefficiencies.Answer: BComment: Among the overall advantages of electronic trading are (1) providing liquidity to the markets, (2) price discovery (particularly for less liquid markets), (3) utilization of new technologies, and (4) trading and portfolio management efficiencies.Diff: 1Topic: 14.7 Electronic TradingObjective: 14.12 the implications of pricing efficiency for market participants7) Which of the below statement is FALSE?A) According to the exchange system, dealer and customer bids and offers are entered into the system on an anonymous basis, and the clearing of the executed trades is done through a common process.B) Although there is a common clearinghouse for bonds, there is none for common stocks.C) According to the exchange system, dealer and customer bids and offers are entered into the system on an anonymous basis, and the clearing of the executed trades is done through a common process.D) The exchange system is quite different rom the dealer-to-customer systems and has potentially significantly greater value added.Answer: BComment: Although there is a common clearinghouse for common stocks (Depository Trust Company), there is none for bonds.Diff: 2Topic: 14.7 Electronic TradingObjective: 14.7 the role of a dealer as a market maker and the costs associated with market makingTrue/False Questions1 Function of Secondary Markets1) Primary markets help the issuer of securities to track their values and required returns. Answer: FALSEComment: Secondary markets help the issuer of securities to track their values and required returns.Diff: 1Topic: 14.1 Function of Secondary MarketsObjective: 14.1 the definition of a secondary market2) Secondary markets hurt investors by providing liquidity.Answer: FALSEComment: Secondary markets benefit investors by providing liquidity.Diff: 1Topic: 14.1 Function of Secondary MarketsObjective: 14.12 the implications of pricing efficiency for market participants2 Trading Locations1) In the United States, secondary trading of common shares are traded on major national stock exchanges and regional stock exchanges, which are organized and somewhat regulated markets in specific geographical locations.Answer: TRUEDiff: 1Topic: 14.2 Trading LocationsObjective: 14.11 the different forms of pricing efficiency2) The dominant OTC market for stocks in the United States is AMEX.Answer: FALSEComment: The dominant OTC market for stocks in the United States is Nasdaq.Diff: 1Topic: 14.2 Trading LocationsObjective: 14.2 the need for secondary markets for financial assets3 Market Structures1) Some markets conduct the day's initial trades with a call method and most other trades in a continuous way.Answer: TRUEDiff: 1Topic: 14.3 Market StructuresObjective: 14.3 the difference between a continuous and a call market2) In a call market, the auction may be oral but not written.Answer: FALSEComment: In a call market, the auction may be oral or writte n.Diff: 1Topic: 14.3 Market StructuresObjective: 14.3 the difference between a continuous and a call market4 Perfect Markets1) Suppose that an investor expects that the price her security will decline. She can still benefit should the price actually decline if she can arrange to sell the security without owning it. Answer: TRUEDiff: 1Topic: 14.4 Perfect MarketsObjective: 14.12 the implications of pricing efficiency for market participants2) A perfect market does not allow the sale of borrowed securities.Answer: FALSEComment: A perfect market must also permit short selling, which is the sale of borrowed securities.Diff: 1Topic: 14.4 Perfect MarketsObjective: 14.4 the requirements of a perfect market5 Role of Brokers and Dealers in Real Markets1) A dealer acts as an auctioneer in all market structures, thereby providing order and fairness in the operations of the market.Answer: FALSEComment: A dealer acts as an auctioneer in some market structures, thereby providing order and fairness in the operations of the market.Diff: 1Topic: 14.5 Role of Brokers and Dealers in Real MarketsObjective: 14.7 the role of a dealer as a market maker and the costs associated with market making。
金融市场与金融机构基础
金融市场与金融机构基础1. 引言金融市场和金融机构是现代金融体系的核心组成部分。
金融市场提供了资金的流动和资源配置的机制，而金融机构则承担着监管、风险管理和融资等职能。
本文将探讨金融市场和金融机构的基础概念、功能以及相互关系。
2. 金融市场基础2.1 金融市场的定义金融市场是指各种交易金融资产的场所和平台。
它可以分为货币市场和资本市场两大类。
货币市场是短期金融资产交易市场，资本市场则是长期金融资产交易市场。
2.2 金融市场的功能金融市场的主要功能包括资金募集、资源配置、风险管理和价格发现。
通过金融市场，企业和个人可以通过发行债券或股票等方式融资，资金会聚集到那些最需要的地方。
同时，金融市场也有助于管理和分散风险，降低市场参与者的风险敞口。
2.3 金融市场的主要类型金融市场可以按照交易对象的性质和期限划分为不同的类型，如股票市场、债券市场、外汇市场和期货市场等。
每种市场都有其独特的特点和功能。
3. 金融机构基础3.1 金融机构的定义金融机构是指各种从事金融业务的机构，包括商业银行、证券公司、保险公司、基金公司和信托公司等。
金融机构扮演着金融市场的参与者和中介角色。
3.2 金融机构的功能金融机构的功能主要包括资金的融入和再分配、风险的管理和监管、支付和结算等。
金融机构通过吸收存款和借款等方式获取资金，再将这些资金分配给那些需要融资的企业和个人。
此外，对于金融机构来说，风险管理也是一项重要职能，包括信用风险、市场风险和操作风险等。
3.3 金融市场与金融机构的关系金融市场和金融机构是相互依存的关系。
金融机构依赖于金融市场来获取资金，而金融市场也需要金融机构来进行交易和风险管理。
金融市场和金融机构共同构成了金融体系的基础，推动了经济的发展和资源的有效配置。
4. 金融市场与金融机构的发展与挑战4.1 金融市场的发展和挑战随着全球化程度的提高和金融创新的推动，金融市场发生了巨大变化。
新兴市场的崛起、数字金融的兴起以及金融科技的应用，都对传统金融市场带来了挑战和机遇。
frank j. fabozzi的主要著作
文章标题：探寻Frank J. Fabozzi的主要著作在金融学领域，Frank J. Fabozzi无疑是一个令人敬畏的名字。
作为一位具有丰富经验和深厚学术造诣的学者和作家，他的著作涵盖了金融学的各个方面，从固定收益证券到资产定价模型，再到金融衍生品。
在本文中，我们将深入探讨Frank J. Fabozzi的主要著作，了解他对金融学研究的巨大贡献。
1. "Fixed Ie Analysis"（固定收益分析）"固定收益分析"是一部由Frank J. Fabozzi主编的权威著作，也是他最具代表性的作品之一。
该书系统地探讨了固定收益证券的种类、特点、风险和定价模型，为读者提供了一套全面的分析框架。
在这本书中，Fabozzi教授不仅详细介绍了债券、抵押证券和其他固定收益产品的基本知识，还深入讨论了它们在不同市场环境下的表现和应用。
2. "The Handbook of Fixed Ie Securities"（固定收益证券手册）与"固定收益分析"相比，"固定收益证券手册"更像是一部综合性的百科全书，涵盖了固定收益证券市场的方方面面。
该书包括了众多专家对于固定收益证券的理论和实践经验的深入探讨，被业界广泛认可为权威性的参考书。
由Fabozzi教授主编的这部手册不仅对传统的债券和抵押证券进行了深度解析，还探讨了各种新兴金融工具和交易策略。
3. "The Handbook of Equity Style Management"（股票风格管理手册）股权管理是另一个Frank J. Fabozzi专注的领域，他在这本手册中系统地总结了股票投资中的风格管理策略。
该书不仅介绍了股票投资中各种不同的风格，如价值投资、成长投资和指数投资，还提供了实用的投资组合构建和管理技巧。
Fabozzi教授在这本书中的研究成果为股票投资者提供了远比简单选股和市场定时更深入的理解和方法。
金融市场与金融机构
第一章 导论一、金融市场的概念：是资金融通市场，是指资金供应者和资金需求者双方通过信用工具进行交易而融通资金的市场，广而言之，是实现货币借贷和资金融通、办理各种票据和有价证券交易活动的市场。
比较完善的金融市场定义是：金融市场是交易金融资产并确定金融资产价格的一种机制 。
二、金融市场的功能——有三个功能：（l）流动性；（2）信息；（3）风险分担三、金融市场的先天缺陷——5个因素：（1）负的外部性；（2）公共品；（3）信息不对称；（4）垄断；（5）经济周期。
这些缺陷意味着金融市场存在着系统性风险，有可能造成金融体系崩溃；而且知情少的一方往往会受到严重的侵害。
因此，健全和完善金融市场，维护金融安全尤为重要。
四、金融市场的分类按金融资产进入市场的时间来划分，金融市场可分为一级市场和二级市场；按期限分，金融市场可分为货币市场（1年以内）和资本市场（1年以上）；注意：货币市场与资本市场的区别。
（货币市场证券一般期限为0到一年不等，最长不能超过一年。
而资本市场证券期限长于一年，一般1年到30年的为中场期债券，股票也属于资本市场债券，其无固定到期日。
）按即时交割或远期交割划分，金融市场可分为现货市场、远期市场以及衍生工具市场；按组织结构划分，金融市场可分为拍卖市场、场外市场和中介市场；等等。
从全球视角看，金融市场又可以分为国内金融市场，国际金融市场和离岸金融市场。
五、金融机构的分类：分为存款性机构和非存款性机构六、做市商：做市商是重要的金融中介机构，它是金融工具买卖双方的联系人，安排和执行买卖双方的交易，在证券买卖中扮演关键角色。
做市商有助于帮助维持一个运行平稳并井然有序的金融市场。
第二章 货币市场一、货币市场的概念和货币市场的功能货币市场：是一个经营短期资金的市场。
货币市场可以调剂短期资金的盈缺，还可帮助流动性管理和负债管理。
货币市场的功能：1、是将个人、公司和政府部门（资金供给者）的短期闲置资金转移给那些需要利用短期资金的经济主体（资金需求者）。
第十四章金融市场
第十四章金融市场第一篇：第十四章金融市场第十四章金融市场第一节金融市场概述一金融市场的概念与特点概念：金融是实现货币借贷、办理各种票据和有价证券买卖的场所。
金融市场可以是具体的固定交易场所，如证券交易所、商业银行等；也可以是观念上的场所，如拆借市场、贴现市场等。
特点：（一）市场商品具有单一性金融市场交易的商品是资金或代表资金的各种票据和证券，并且这种商品的使用价值都是相同的，即交易商品的获利功能。
（二）交易价格具有特殊性金融商品的价格表现为利息率，即在资金供求关系决定下，形成市场利息率，各种进入商品都按市场利息率进行交易（三）交易目的具有多重性金融商品的交易目的比较复杂：在发行市场，发行者的目的是筹集资金用于生产经营活动，购买者主要是投资获利；在交易市场，金融商品交易目的主要表现为为了获取投资回报而购买证券、急需现金而卖出证券、回避风险而卖出证券、进行投机获利而买卖证券。
二金融市场的构成要素（一）资金供给者资金供给者即金融市场的投资人，也就是金融商品的购买者。
资金供给者包括金融机构、企业、个人及政府部门等。
（二）资金需求者资金需求者及金融市场的筹资人，也就是金融商品的发行者或出卖者。
在金融市场上进行筹集资金的有企业、政府、金融机构和个人。
（三）中介者中介者即在资金供给者和资金需求者的资金融通过程中，起媒介和桥梁作用的机构和个人。
金融市场中介者主要包括金融机构和经纪人。
（四）金融商品金融商品也称为金融工具或信用工具，是证明信用关系存在及条件有效的一种合法凭证。
金融商品是金融市场的交易对象，是金融市场的构成要素之一。
三金融市场的分类（一）按交易对象分类按交易对象分类，即以金融市场交易的具体商品的性质特点为标准金融市场可分为拆借市场、票据市场、CD市场、证券市场、黄金市场、外汇市场和保险市场等。
（二）按期限分类按期限划分，金融市场可分为短期金融市场和长期金融市场。
短期金融市场：是指融资期限在1年以内的金融市场，融资偿还期比较短，流动性较高，风险较小，也称为货币市场。
(完整word版)金融市场与金融机构基础 Fabozzi Chapter10(word文档良心出品)
Foundations of Financial Markets and Institutions, 4e (Fabozzi/Modigliani/Jones)Chapter 10 The Level and Structure of Interest RatesMultiple Choice Questions1 The Theory of Interest Rates1) An interest rate is the price paid by a ________ to a ________ for the use of resources during some interval.A) borrower; debtorB) lender; creditorC) borrower; lenderD) lender; borrowerAnswer: CComment: An interest rate is the price paid by a borrower (or debtor) to a lender (or creditor) for the use of resources during some interval.Diff: 2Topic: 10.1 The Theory of Interest RatesObjective: 10.1 Fisher's classical approach to explaining the level of the interest rate2) By the ________, we mean the rate on a loan whose borrower will not default on any obligation.A) risk-free rateB) short termC) real rateD) long termAnswer: AComment: The interest rate that provides the anchor for other rates is the short-term rate:risk-free plus real rate. By short term, we mean the rate on a loan that has one year to maturity. (All other interest rates differ from this rate according to particular aspects of the loan, such as its maturity or risk of default, or because of the presence of inflation.) By the risk-free rate, we mean the rate on a loan whose borrower will not default on any obligation. By the real rate, we mean the rate that would prevail in the economy if the average prices for goods and services were expected to remain constant during the loan’s life.Diff: 1Topic: 10.1 The Theory of Interest RatesObjective: 10.4 the structure of Fisher's Law, which states that the nominal and observable interest rate is composed of two unobservable variables; the real rate of interest and the premium for expected inflation3) By the ________, we mean the rate that would prevail in the economy if the average prices for goods and services were expected to remain constant during the loan's life.A) risk-free rateB) short termC) real rateD) long termAnswer: CComment: The interest rate that provides the anchor for other rates is the short-term rate:risk-free plus real rate. By short term, we mean the rate on a loan that has one year to maturity. (All other interest rates differ from this rate according to particular aspects of the loan, such as its maturity or risk of default, or because of the presence of inflation.) By the risk-free rate, we mean the rate on a loan whose borrower will not default on any obligation. By the real rate, we mean the rate that would prevail in the economy if the average prices for goods and services were expected to remain constant during the loan’s life.Diff: 1Topic: 10.1 The Theory of Interest RatesObjective: 10.4 the structure of Fisher's Law, which states that the nominal and observable interest rate is composed of two unobservable variables; the real rate of interest and the premium for expected inflation4) By the ________, we mean the rate on a loan that has one year to maturity.A) risk-free rateB) short termC) real rateD) long termAnswer: BComment: The interest rate that provides the anchor for other rates is the short-term rate:risk-free plus real rate. By short term, we mean the rate on a loan that has one year to maturity. (All other interest rates differ from this rate according to particular aspects of the loan, such as its maturity or risk of default, or because of the presence of inflation.) By the risk-free rate, we mean the rate on a loan whose borrower will not default on any obligation. By the real rate, we mean the rate that would prevail in the economy if the average prices for goods and services were expected to remain constant during the loan’s life.Diff: 2Topic: 10.1 The Theory of Interest RatesObjective: 10.1 Fisher's classical approach to explaining the level of the interest rate5) Which of the below statements about consumptions and savings is FALSE?A) A chief influence on the saving decision is the individual's marginal rate of time preference, which is the willingness to trade some consumption now for more future consumption.B) Generally, higher current income means the person will save more, although people with the same income may have different time preferences.C) A variable affecting savings is the reward for saving, or the rate of interest on loans that savers make with their unconsumed income.D) The total savings (or the total supply of loans) available at any time is the sum of everybody's savings and a negative function of the interest rate.Answer: DComment: The total savings (or the total supply of loans) available at any time is the sum of everybody’s savings and a positive function of the interest rate.Diff: 2Topic: 10.1 The Theory of Interest RatesObjective: 10.2 the role in Fisher's theory of the saver's time preference and the borrowing firm's productivity of capital6) Which of the below statements about the rate of interest and cost of capital is FALSE?A) The maximum that a firm will invest depends on the rate of interest, which is the cost of loans; the firm will invest only as long as the marginal productivity of capital exceeds or equals the rate of interest.B) Firms will reject only projects whose gain is not less than their cost of financing.C) The firm's demand for borrowing is negatively related to the interest rate; if the rate is high, only limited borrowing and investment make sense.D) At a low rate of interest, more projects offer a profit, and the firm wants to borrow more; his negative relationship exists for each and all firms in the economy.Answer: BComment: The maximum that a firm will invest depends on the rate of interest, which is the cost of loans. The firm will invest only as long as the marginal productivity of capital exceeds or equals the rate of interest. In other words, firms will accept only projects whose gain is not less than their cost of financing. Thus, the firm’s demand for borrowing is negatively related to the interest rate. If the rate is high, only limited borrowing and investment make sense. At a low rate, more projects offer a profit, and the firm wants to borrow more. This negative relationship exists for each and all firms in the economy.Diff: 2Topic: 10.1 The Theory of Interest RatesObjective: 10.2 the role in Fisher's theory of the saver's time preference and the borrowing firm's productivity of capital7) The ________ rate of interest is determined by interaction of the supply and demand functions. As a cost of borrowing and a reward for lending, the rate must reach the point where total supply of savings ________ total demand for borrowing and investment.A) equilibrium; is greaterB) minimum; equalsC) equilibrium; equalsD) minimum; is greaterAnswer: CDiff: 2Topic: 10.1 The Theory of Interest RatesObjective: 10.3 the meaning of equilibrium and how changes in the demand and supply function affect the equilibrium level of the interest rate8) In the absence of inflation, the nominal rate ________ the real rate.A) equalsB) is greater thanC) is less thanD) greater than or equal toAnswer: ADiff: 1Topic: 10.1 The Theory of Interest RatesObjective: 10.3 the meaning of equilibrium and how changes in the demand and supply function affect the equilibrium level of the interest rate9) The relationship between inflation and interest rates is the well-known Fisher's Law, which can be expressed this way: (1 + i) = (1 + r) × (1 + i) where ________.A) r is the nominal rate.B) i is the real rate.C) p is the expected percentage change in the price level of goods and services over the loan's life.D) the nominal rate, p, reflects both the real rate and expected inflation.Answer: CComment: The relationship between inflation and interest rates is the well-known Fisher’s Law, which can be expressed this way: (1 + i) = (1 + r) × (1 + i) where i is the nominal rate, r is the real rate, and p is the expected percentage change in the price level of goods and services over the loan’s life. This equation shows that the nominal rate, i, reflects both the real rate and expected inflation.Diff: 2Topic: 10.1 The Theory of Interest RatesObjective: 10.4 the structure of Fisher's Law, which states that the nominal and observable interest rate is composed of two unobservable variables; the real rate of interest and the premium for expected inflation10) Which of the below IS considered by Fisher's theory.A) Fisher's theory takes into account the power of the government (in concert with depository institutions) to create money.B) Fisher's theory considers the government's often large demand for borrowed funds, which is frequently immune to the level of the interest rateC) Fisher's theory takes into account the possibility that individuals and firms might invest in cash balances.D) Fisher's theory considers an interest rate on loans that embodies no premium for default risk because borrowing firms are assumed to meet all obligations.Answer: DComment: Fisher’s theory is a general one and obviously neglects certain practical matters, such as the power of the government (in concert with depository institutions) to create money and the government’s often la rge demand for borrowed funds, which is frequently immune to the level of the interest rate. Also, Fisher’s theory does not consider the possibility that individuals and firms might invest in cash balances. Expanding Fisher’s theory to encompass these situations produces the loanable funds theory of interest rates.Diff: 2Topic: 10.1 The Theory of Interest RatesObjective: 10.4 the structure of Fisher's Law, which states that the nominal and observable interest rate is composed of two unobservable variables; the real rate of interest and the premium for expected inflation11) The loanable funds theory of interest rates proposes that the general level of interest rates is determined by the complex interaction of two forces. Which of the below is ONE of these forces?A) One force is that the total demand for funds by firms, governments, and households (or individuals) is negatively related to the interest rate including the government's demand.B) One force affecting the level of the interest rate is the total supply of funds by firms, governments, banks, and individuals with rising rates causing banks to be less eager to extend more loans.C) One force is that the total demand for funds by firms, governments, and households (or individuals) is positively related to the interest rate except the government's demand.D) One force affecting the level of the interest rate is the total supply of funds by firms, governments, banks, and individuals with rising rates causing firms and individuals to save and lend more.Answer: DComment: The loanable funds theory of interest rates proposes that the general level of interest rates is determined by the complex interaction of two forces. The first is the total demand for funds by firms, governments, and households (or individuals), which carry out a variety of economic activities with those funds. This demand is negatively related to the interest rate (except for the government’s demand, which may frequently not depend on the level of the interest rate). The second force affecting the level of the interest rate is the total supply of funds by firms, governments, banks, and individuals. Supply is positively related to the level of interest rates, if all other economic factors remain the same. With rising rates, firms and individuals save and lend more, and banks are more eager to extend more loans. (A rising interest rate probably does not significantly affect the government’s supply of savings.)Diff: 3Topic: 10.1 The Theory of Interest RatesObjective: 10.5 the loanable funds theory, which is an expansion of Fisher's theory12) The ________, originally developed by John Maynard Keynes,analyzes the equilibrium level of the interest rate through the interaction of the supply of money and the public's aggregate demand for holding money.A) loanable funds theory of interest ratesB) expectation theory of interest ratesC) liquidity preference theoryD) Fisher theoryAnswer: CDiff: 2Topic: 10.1 The Theory of Interest RatesObjective: 10.6 the meaning of liquidity preference in Keynes's theory of the determination of interest rates13) The public (consisting of individuals and firms) holds money for several reasons. Which of the below is three of these?A) Difficulty of translations, precaution against expected events, and speculation about possible rises in the interest rate.B) Ease of transactions, precaution against unexpected events, and speculation about possible rises in the interest rate.C) Ease of unexpected events, precaution against transactions, and speculation about possible rises in the interest rate.D) Speculation about transactions, fear against unexpected events, and precaution about possible rises in the interest rate.Answer: BDiff: 2Topic: 10.1 The Theory of Interest RatesObjective: 10.6 the meaning of liquidity preference in Keynes's theory of the determination of interest rates14) The ________ represents the initial reaction of the interest rate to a change in the money supply.A) Income effectB) Price expectation effectC) Liquidity effectD) Interest rate effectAnswer: CDiff: 2Topic: 10.1 The Theory of Interest RatesObjective: 10.7 how an increase in the money supply can affect the level of the interest rate through an impact on liquidity, income, and price expectations15) Which of the below statements is FALSE?A) Although an increase in the money supply is an economically expansionary policy, the resultant increase in income depends substantially on the amount of slack in the economy at the time of the Fed's action.B) In Fisher's terms, the interest rate reflects the interaction of the savers' marginal rate of time preference and borrowers' marginal productivity of capital.C) Changes in the money supply can affect the level of interest rates through the liquidity effect, the income effect, and the price expectations effect; their relative magnitudes depend upon the level of economic activity at the time of the change in the money supply.D) Because the price level (and expectations regarding its changes) affects the money demand function, the liquidity effect is an increase in the interest rate.Answer: DComment: Because the price level (and expectations regarding its changes) affects the money demand function, the price expectations effect is an increase in the interest rate.Diff: 2Topic: 10.1 The Theory of Interest RatesObjective: 10.7 how an increase in the money supply can affect the level of the interest rate through an impact on liquidity, income, and price expectations2 The Determinants of the Structure of Interest Rates1) A ________ is an instrument in which the issuer (debtor/borrower) promises to repay to the lender/investor the amount borrowed plus interest over some specified period of time.A) bondB) common stockC) preferred stockD) T-billAnswer: ADiff: 1Topic: 10.2 The Determinants of the Structure of Interest RatesObjective: 10.8 the features of a bond issue2) The ________ should reflect the coupon interest that will be earned plus either (1) any capital gain that will be realized from holding the bond to maturity, or (2) any capital loss that will be realized from holding the bond to maturity.A) yield on a bond investmentB) dividend yield on a bond investmentC) bid-ask spreadD) yield on a stock investmentAnswer: ADiff: 1Topic: 10.2 The Determinants of the Structure of Interest RatesObjective: 10.8 the features of a bond issue3) The ________ the market price, the higher the yield to maturity.A) higherB) less riskyC) more safeD) lowerAnswer: DDiff: 1Topic: 10.2 The Determinants of the Structure of Interest RatesObjective: 10.8 the features of a bond issue4) The ________ of a bond is the amount that the issuer agrees to repay the bondholder at the maturity date.A) principal value (or simply principal)B) face valueC) redemption valueD) All of theseAnswer: DComment: The principal value (or simply principal) of a bond is the amount that the issuer agrees to repay the bondholder at the maturity date. This amount is also referred to as the par value, maturity value, redemption value, or face value.Diff: 2Topic: 10.2 The Determinants of the Structure of Interest RatesObjective: 10.8 the features of a bond issue5) The yield to maturity is determined by a trial-and-error process. The first step in this trial and error process is ________.A) Compute the present value of each cash flow using the best guess interest rate.B) Total the present value of the cash flows using the best guess interest rate.C) Select an interest rate.D) Compare the total present value using the best guess interest rate with the market price of the bond.Answer: CComment: The yield to maturity is determined by a trial-and-error process. Even the algorithm in a calculator or computer program, which computes the yield to maturity (or internal rate of return) in an apparently direct way, uses a trial-and-error process. The steps in that process are as follows:Step 1: Select an interest rate.Step 2: Compute the present value of each cash flow using the interest rate selected in Step 1. Step 3: Total the present value of the cash flows found in Step 2.Step 4: Compare the total present value found in Step 3 with the market price of the bond and, if the total present value of the cash flows found in Step 3 is• equal to the market price, then the interest rate used in Step 1 is the yield to maturity;• greater than the market price, then the interest rate is not the yield to maturity. Therefore, go back to Step 1 and use a higher interest rate;• less than the market price, then the interest rate is not the yield to maturity. Therefore, go back to Step 1 and use a lower interest rate.Diff: 2Topic: 10.2 The Determinants of the Structure of Interest RatesObjective: 10.9 how the yield to maturity of a bond is calculated6) There are several interesting points about the relationship among the coupon rate, market price, and yield to maturity. Which of the below is NOT one of these.A) If the market price is equal to the par value, then the yield to maturity is equal to the coupon rate.B) If the market price is less than the par value, then the yield to maturity is greater than the coupon rate.C) If the market price is greater than the par value, then the yield to maturity is greater than the coupon rate.D) If the market price is greater than the par value, then the yield to maturity is less than the coupon rate.Answer: CComment: There are several interesting points about the relationship among the coupon rate, market price, and yield to maturity as summarized below.1. If the market price is equal to the par value, then the yield to maturity is equal to the coupon rate;2. If the market price is less than the par value, then the yield to maturity is greater than the coupon rate, and;3. If the market price is greater than the par value, then the yield to maturity is less than the coupon rate.Diff: 2Topic: 10.2 The Determinants of the Structure of Interest RatesObjective: 10.9 how the yield to maturity of a bond is calculated7) Consider an 20-year bond with a coupon rate of 8% and a par value of $1,000. The cash flow for this bond is ________ every six months for the first 39 semi-annual periods and then________ for the last (or 40th) six-month period.A) $1,040; $40B) $40; $1,040C) $80; $1,080D) $80; $1,000Answer: BComment: Consider an 20-year bond with a coupon rate of 8% and a par value of $1,000. The cash flow for this bond is $40 every six months for the first 39 semi-annual periods and then $1,040 for the last (or 40th) six-month period.Diff: 2Topic: 10.2 The Determinants of the Structure of Interest RatesObjective: 10.8 the features of a bond issue8) The difference between the yield on any two bond issues is called a ________.A) yield differenceB) difference spreadC) coupon rate spreadD) yield spreadAnswer: DDiff: 2Topic: 10.2 The Determinants of the Structure of Interest RatesObjective: 10.13 what factors affect the yield spread between two bonds9) Treasury securities are used to develop the benchmark interest rates. There are two categories of U.S. Treasury securities: ________.A) discount and coupon securities.B) discount and coupon stocks.C) interest rate and coupon securities.D) discount and compound securities.Answer: ADiff: 2Topic: 10.2 The Determinants of the Structure of Interest RatesObjective: 10.1 Fisher's classical approach to explaining the level of the interest rate10) The most recently auctioned Treasury issues for each maturity are referred to as ________.A) off-the-run issues or current coupon issues.B) minimum interest rate or base interest rateC) on-the- run or current coupon issues.D) benchmark interest rate or minimum interest rate.Answer: CComment: The most recently auctioned Treasury issues for each maturity are referred to as on-the- run or current coupon issues. Issues auctioned prior to the current coupon issues are typically referred to as off-the- run issues; they are not as liquid as on-the-run issues, and, therefore, offer a higher yield than the corresponding on-the-run Treasury issue. The minimum interest rate or base interest rate that investors will demand for investing in a non-Treasury security is the yield offered on a comparable maturity on-the-run Treasury security. The base interest rate is also referred to as the benchmark interest rate.Diff: 2Topic: 10.2 The Determinants of the Structure of Interest RatesObjective: 10.10 why historically the yields on securities issued by the U.S. Department of the Treasury have been used as the benchmark interest rates throughout the world11) Market participants talk of interest rates on non-Treasury securities as ________ to a particular on-the-run Treasury security (or a spread to any particular benchmark interest rate selected). This spread reflects the additional risks the investor faces by acquiring a security thatis not issued by the U.S. government and, therefore, can be called a ________.A) "trading at a premium"; risk premiumB) "trading at a spread"; risk premiumC) "trading at a premium"; risk spreadD) "trading at a discount"; discount premiumAnswer: BComment: Market participants talk of interest rates on non-Treasury securities as “trading at a spread” to a particular on-the-run Treasury security (or a spread to any particular benchmark interest rate selected). For example, if the yield on a 10-year non-Treasury security on May 20, 2008, is 4.78%, then the spread is 100 basis points over the 3.78% Treasury yield. This spread reflects the additional risks the investor faces by acquiring a security that is not issued by the U.S. government and, therefore, can be called a risk premium.Diff: 2Topic: 10.2 The Determinants of the Structure of Interest RatesObjective: 10.13 what factors affect the yield spread between two bonds12) The factors that affect the spread include ________.A) the type of issuer and the expected liquidity of the issueB) the provisions that grant either the issuer or the investor the obligation to do something and the taxability of the interest received by the issuerC) the investor's perceived creditworthiness and the term or maturity of the investor's horizon.D) All of theseAnswer: AComment: The factors that affect the spread are (1) the type of issuer, (2) the issuer’s perceived creditworthiness, (3) the term or maturity of the instrument, (4) provisions that grant either the issuer or the investor the option to do something, (5) the taxability of the interest received by investors, and (6) the expected liquidity of the issue.Diff: 2Topic: 10.2 The Determinants of the Structure of Interest RatesObjective: 10.13 what factors affect the yield spread between two bonds13) Within the corporate market sector, issuers are classified as ________.A) (1) utilities, (2) industrials, (3) finance, and (4) banks.B) (1) high-risk, (2) medium-risk, (3) low-risk, and (4) no-risk.C) (1) foreign, (2) domestic, (3) European, and (4) Asian.D) (1) intramarket, (2) extramarket, (3) ultramarket, and (4) intermarket.Answer: AComment: Within the corporate market sector, issuers are classified as follows: (1) utilities, (2) industrials, (3) finance, and (4) banks.Diff: 2Topic: 10.2 The Determinants of the Structure of Interest RatesObjective: 10.12 the different types of bonds14) The highest-grade bonds are designated by Moody's by the symbol ________.A) BaB) AC) AaD) AaaAnswer: DComment: In all systems, the term high grade means low credit risk, or conversely, high probability of future payments. The highest-grade bonds are designated by Moody’s by the symbol Aaa, and by S&P and Fitch by the symbol AAA. The next highest grade is denoted by the symbol Aa (Moody’s) or AA (S&P and Fitch); for the third grade, all rating systems use A. The next three grades are Baa or BBB, Ba or BB, and B, respectively. There are also C grades. Moody’s uses 1, 2, or 3 to provi de a narrower credit quality breakdown within each class, andS&P and Fitch use plus and minus signs for the same purpose.Diff: 1Topic: 10.2 The Determinants of the Structure of Interest RatesObjective: 10.12 the different types of bonds15) Which of the below statements is FALSE?A) The spread between Treasury securities and non-Treasury securities that are identical in all respects except for credit quality is referred to as a credit spread.B) The spread between any two maturity sectors of the market is called a maturity spread or yield curve spread.C) An option that is included in a bond issue is referred to as a prepayment option.D) The most common type of option in a bond issue is a call provision.Answer: CComment: It is not uncommon for a bond issue to include a provision that gives either the bondholder and/or the issuer an option to take some action against the other party. An option that is included in a bond issue is referred to as an embedded option.Diff: 2Topic: 10.2 The Determinants of the Structure of Interest RatesObjective: 10.12 the different types of bondsTrue/False Questions1 The Theory of Interest Rates1) The liquidity preference theory is Keynes's view that the rate of interest is set in the market for money balances.Answer: TRUEDiff: 1Topic: 10.1 The Theory of Interest RatesObjective: 10.6 the meaning of liquidity preference in Keynes's theory of the determination of interest rates2) Interest is the price paid for the permanent use of resources, and the amount of a loan is its principal.Answer: FALSEComment: Interest is the price paid for the temporary use of resources, and the amount of a loan is its principal.Diff: 1Topic: 10.1 The Theory of Interest RatesObjective: 10.7 how an increase in the money supply can affect the level of the interest rate through an impact on liquidity, income, and price expectations3) In Fisher's terms, the interest rate reflects the interaction of the savers' marginal productivity of capital and borrowers' marginal rate of time preference.Answer: FALSEComment: In Fisher’s terms, the interest rate reflects the interaction of the savers’ marginal rate of time preference and borrowers’ marginal productivity of capital.Diff: 1Topic: 10.1 The Theory of Interest RatesObjective: 10.2 the role in Fisher's theory of the saver's time preference and the borrowing firm's productivity of capital4) The loanable funds theory is an extension of Fisher's theory and proposes that the equilibrium rate of interest reflects the demand and supply of funds, which depend on savers' willingness to save, borrowers' expectations regarding the profitability of investing, and the government's action regarding money supply.Answer: TRUEDiff: 1Topic: 10.1 The Theory of Interest RatesObjective: 10.5 the loanable funds theory, which is an expansion of Fisher's theory2 The Determinants of the Structure of Interest Rates1) Convertible bonds are securities issued by state and local governments and by their creations, such as "authorities" and special districts.Answer: FALSEComment: Municipal bonds are securities issued by state and local governments and by their creations, such as “authorities” and special districts.Diff: 1Topic: 10.2 The Determinants of the Structure of Interest RatesObjective: 10.11 the reason why the yields on U.S. Treasury securities are no longer as popular as benchmark interest rates and what alternative benchmarks are being considered by market participants。
金融市场与金融机构基础
一、保险的种类
（十一）单一险种的保险公司： 单一险种的承保人对债券投保人提供到期无法支付本 息的担保。单一险种保险公司之所以称之为“单一”， 是由于其只对资本市场这一个行业提供服务。过去所 投保的债券都是市政债券，目前也包括一些结构性的 金融债券，比如，债券抵押债券、贷款抵押债券、资 产担保债券以及其他一些相关的产品。 单一险种的保险公司对债务人不能支付时提供服务， 另一方面，常常要求一个漫长的索赔过程，需要提交 文件以及调整程序。 单一险种的保险公司被评为AAA级，公司必须要有高 的信用等级，因为他们的这个等级会转移到债券发行 人的担保上。承保人对债券发生人提供保险，并从中 收取保费。这个保险允许发行的债券达到AAA级。
一、保险的种类
（九）投资型产品：有担保投资合约 保险公司越来越多地销售产品，这些产品当中除了其保险产品之外 还有许多的投资产品。人寿保险公司开发的第一个投资型产品是有 有 担保投资合约，根据有担保的合约，在一个单一的溢价回报中，人 担保投资合约 寿保险公司同意在投资期内向投保人支付本金以及事先决定的年度 抵补率，所有的支付发生在有担保合约的到期日。 保险公司所面对的风险就是所持有资产组合的回报小于向客户所保 险的比率。 有担保投资合约的到期可以是1年到20年不等，有保证的利率依赖于 市场条件以及保险公司的信用级别。这些产品通常向个人出售，也 有作为养老金投资的养老金计划发起人来购买。 人寿保险公司发行有担保投资合约只是债务责任。担保一词并不意 味着在保险公司之外还有另外的担保人。
二、保险公司与对应的产品种类
传统上，生命与健康保险被联系在一起形成生命与健康 保险公司，财产险与意外伤害险被联系在一起形成财产 与意外伤害保险公司，同时提供两种保险产品的公司被 称为多行保险公司。 近年来不同的保险公司所组合的产品出现一些变化。这 个变化主要是由于联邦监管机构对健康保险产业的监管 所引起。人寿保险公司不断推出投资导向型产品，既有 固定年金也有可变年金，还有共同基金。伤残险目前主 要由纯粹的伤残险公司销售，但是有些人寿保险公司也 提供这样的产品。
金融市场基础知识pdf
金融市场基础知识pdf金融市场基础知识PDF文档摘要：金融市场是一种经济机制，为资金在各类金融工具和交易中进行配置和流动提供了平台。
金融市场涉及多个方面的知识，包括金融产品、交易方式以及市场参与者等。
本文档将详细介绍金融市场的基础知识，以帮助读者更好地了解这一领域。
第一部分：金融市场概述一、金融市场定义和功能金融市场的定义以及它所提供的各种功能，包括资金融通、风险管理、信息传递等。
二、金融市场分类将金融市场按不同标准进行分类，如参与主体、交易方式、产品类型等。
三、金融市场参与者介绍金融市场中的各类参与者，包括个人投资者、机构投资者、证券公司、银行等。
第二部分：金融产品与交易方式一、金融产品介绍金融市场中常见的金融产品，包括股票、债券、期货、期权和外汇等。
二、交易方式介绍金融市场中的常见交易方式，如场内交易和场外交易等。
三、金融市场指数解释金融市场指数的概念和作用，如股票市场中的指数、债券市场中的指数等。
第三部分：金融市场运行机制一、信息传递机制介绍金融市场中的信息传递过程，包括信息获取、信息发布和信息利用等。
二、定价机制解释金融市场中的定价机制，包括供求关系、市场竞争和市场预期等对价格的影响。
三、风险管理讨论金融市场中的风险管理，包括风险的类型、风险管理工具和风险避险策略等。
第四部分：金融市场监管一、金融市场监管机构介绍金融市场监管的机构和职责，包括中央银行、证监会等。
二、金融市场监管制度解释金融市场监管制度，包括法律法规、交易规则和监管措施等。
三、金融市场失灵讨论金融市场失灵的原因和影响，以及相关的监管手段和措施。
结论：金融市场是现代经济中不可或缺的一部分，它为资金配置和流动提供了重要的平台。
通过本文档的学习，读者将对金融市场的基础知识有更深入的了解，能够更好地理解金融市场的运作机制和参与方式。
此外，了解金融市场监管的相关知识也将对个人投资者和机构投资者在金融市场中做出明智的决策起到积极的作用。
【免费下载】金融市场与金融机构基础 Fabozzi Chapter14
Foundations of Financial Markets and Institutions, 4e (Fabozzi/Modigliani/Jones)Chapter 14 Secondary MarketsMultiple Choice Questions1 Function of Secondary Markets1) The key distinction between a primary market and a secondary market is that, in the secondary market, ________.A) funds flow from the seller of the asset to the buyer.B) the issuer of the asset receives funds from the buyer.C) funds flow from the buyer of the asset to the seller.D) the existing issue changes hands in the primary market.Answer: CComment: The key distinction between a primary market and a secondary market is that, in the secondary market, the issuer of the asset does not receive funds from the buyer. Rather, the existing issue changes hands in the secondary market, and funds flow from the buyer of the asset to the seller.Diff: 2Topic: 14.1 Function of Secondary MarketsObjective: 14.1 the definition of a secondary market2) Without a secondary market, issuers would be unable to ________, or they would have to paya higher rate of return, as investors would ________ in compensation for expected illiquidity in the securities.A) sell new securities; increase the discount rateB) sell new securities; decrease the discount rateC) buy new securities; decrease the priceD) sell new securities; increase the priceAnswer: ADiff: 2Topic: 14.1 Function of Secondary MarketsObjective: 14.12 the implications of pricing efficiency for market participants3) Investors in financial assets receive ________.A) illiquidity for their assets.B) information about the assets' fair or consensus values.C) increased the costs of searching for likely buyers and sellers of assets.D) the disadvantage of higher transaction costs.Answer: BComment: Investors in financial assets receive several benefits from a secondary market. Such a market obviously offers them liquidity for their assets as well as information about the assets’ fair or consensus values. Furthermore, secondary markets bring together many interested parties and thereby reduce the costs of searching for likely buyers and sellers of assets. Moreover, by accommodating many trades, secondary markets keep the cost of transactions low. By keeping the costs of both searching and transacting low, secondary markets encourage investors to purchase financial assets.Diff: 2Topic: 14.1 Function of Secondary MarketsObjective: 14.12 the implications of pricing efficiency for market participants2 Trading Locations1) One indication of the usefulness of secondary markets is that they exist throughout ________.A) the United States.B) Europe and Asia.C) each state.D) the world.Answer: DDiff: 1Topic: 14.2 Trading LocationsObjective: 14.2 the need for secondary markets for financial assets2) In the United States, secondary trading of common stock occurs ________.A) in a number of trading locations.B) in Dallas, Texas.C) in each major city.D) None of theseAnswer: ADiff: 1Topic: 14.2 Trading LocationsObjective: 14.2 the need for secondary markets for financial assets3) Which of the below statements is TRUE?A) In the United States, secondary shares are traded on major national stock exchanges (the largest of which is the American Stock Exchange) and regional stock exchanges.B) In the United States, significant trading in stock takes place on the so-called over-the-counter or OTC market, which involves specific geographical locations.C) In the United States, the dominant OTC market for stocks in the United States is the New York Stock Exchange.D) In the United States, some bonds are traded on exchanges, but most trading in bonds in the United States and throughout the world occurs in the OTC market.Answer: DComment: In the United States, secondary trading of common stock occurs in a number of trading locations. Many shares are traded on major national stock exchanges (the largest of which is the New York Stock Exchange) and regional stock exchanges, which are organized and somewhat regulated markets in specific geographical locations. Additional significant trading in stock takes place on the so-called over-the-counter or OTC market, which is a geographically dispersed group of traders linked to one another via telecommunication systems. The dominant OTC market for stocks in the United States is Nasdaq. Some bonds are traded on exchanges, but most trading in bonds in the United States and throughout the world occurs in the OTC market.Diff: 2Topic: 14.2 Trading LocationsObjective: 14.2 the need for secondary markets for financial assets3 Market Structures1) In a continuous market, prices may vary ________.A) because of the basic situation of supply and demand.B) are determined discontinuously throughout the trading day.C) are determined continuously throughout the trading day even if buyers and sellers are not submitting orders.D) with the pattern of orders reaching the market.Answer: DComment: Many secondary markets are continuous, which means that prices are determined continuously throughout the trading day as buyers and sellers submit orders. For example, given the order flow at 10:00 A.M., the market clearing price of a stock on some organized stock exchange may be $70; at 11:00 A.M. of the same trading day, the market-clearing price of the same stock, but with different order flows, may be $70.75. Thus, in a continuous market, prices may vary with the pattern of orders reaching the market and not because of any change in the basic situation of supply and demand.Diff: 2Topic: 14.3 Market StructuresObjective: 14.3 the difference between a continuous and a call market2) ________, orders are grouped together for simultaneous execution at the same price.A) In a bull marketB) In an efficient marketC) In a call marketD) In a bear marketAnswer: CDiff: 2Topic: 14.3 Market StructuresObjective: 14.3 the difference between a continuous and a call market3) Which of the below statements is FALSE?A) In a call market, a market maker holds an auction for a stock at certain times in the trading day (or possibly more than once in a day).B) Many secondary markets are continuous, which means that prices are determined continuously throughout the trading day as buyers and sellers submit orders.C) In a call market, a market maker holds an auction for a stock at the same time each day.D) An auction in a call market may be oral or written.Answer: CComment: In a call market, a market maker holds an auction for a stock at certain times in the trading day (or possibly more than once in a day).Diff: 2Topic: 14.3 Market StructuresObjective: 14.3 the difference between a continuous and a call market4 Perfect Markets1) Perfect market results when ________.A) the number of buyers and sellers is sufficiently small, and all participants are small enough relative to the market so that no individual market agent can influence the commodity's price. B) the number of buyers and sellers is sufficiently large, and all participants are small enough relative to the market so that all individual market agent can influence the commodity's price. C) the number of buyers and sellers is sufficiently large, and all participants are small enough relative to the market so that no individual market agent can influence the commodity's price. D) the number of buyers and sellers is sufficiently small, and all participants are small enough relative to the market so that all individual market agent can influence the commodity's price. Answer: CComment: In general, a perfect market results when the number of buyers and sellers is sufficiently large, and all participants are small enough relative to the market so that no individual market agent can influence the commodity’s price.Diff: 2Topic: 14.4 Perfect MarketsObjective: 14.4 the requirements of a perfect market2) A perfect market results when all buyers and sellers are ________, and the market price is determined where there is ________.A) price-takers; equality of supply and demand.B) price-makers; equality of supply and demand.C) price-takers; inequality of supply and demand.D) price-makers; inequality of supply and demand.Answer: ADiff: 2Topic: 14.4 Perfect MarketsObjective: 14.4 the requirements of a perfect market3) A market is not perfect only because market agents are price takers but is also free of transactions costs and any impediment to the interaction of supply and demand for the commodity. Economists refer to these various costs and impediments as frictions. Frictions include ________.A) bid-ask spreads charged by dealers and order handling and clearance charges.B) taxes (but not on capital gains) and government-imposed transfer fees.C) costs of acquiring information about the financial asset and restrictions on market takers.D) financial liability that a buyer or seller may take and taxes on capital gains.Answer: AComment: A market is not perfect only because market agents are price takers. A perfect market is also free of transactions costs and any impediment to the interaction of supply and demand for the commodity. Economists refer to these various costs and impediments as frictions. The costs associated with frictions generally result in buyers paying more than in the absence of frictions and/or in sellers receiving less commissions charged by brokers. Frictions include:bid—ask spreads charged by dealers.order handling and clearance charges.taxes (notably on capital gains) and government-imposed transfer fees.costs of acquiring information about the financial asset.trading restrictions, such as exchange-imposed restrictions on the size of a position in the financial asset that a buyer or seller may take.restrictions on market makers.halts to trading that may be imposed by regulators where the financial asset is traded.Diff: 2Topic: 14.4 Perfect MarketsObjective: 14.4 the requirements of a perfect market4) This practice of selling securities that are not owned at the time of sale is referred to as________.A) buying short.B) selling short.C) selling long.D) buying and selling simultaneously.Answer: BDiff: 2Topic: 14.4 Perfect MarketsObjective: 14.4 the requirements of a perfect market5) In the absence of an effective short-selling mechanism, security prices will tend to be biased toward the ________, causing a market to depart from the standards of a perfect price-setting situation.A) view of more pessimistic investorsB) view of the market makerC) view of more optimistic investorsD) view of the market takerAnswer: CDiff: 2Topic: 14.4 Perfect MarketsObjective: 14.4 the requirements of a perfect market5 Role of Brokers and Dealers in Real markets1) ________ are necessary to the smooth functioning of a secondary market.A) Inexperienced investorsB) Initial public offeringsC) Investment bankersD) Brokers and dealersAnswer: DDiff: 2Topic: 14.5 Role of Brokers and Dealers in Real MarketsObjective: 14.6 why brokers are necessary2) Investors need brokers to help ________.A) execute their orders.B) find other parties wishing to sell or buy.C) negotiate for good prices.D) All of theseAnswer: DComment: Investors need brokers to receive and keep track of their orders for buying or selling, to find other parties wishing to sell or buy, to negotiate for good prices, to serve as a focal point for trading, and to execute the orders.Diff: 1Topic: 14.5 Role of Brokers and Dealers in Real MarketsObjective: 14.6 why brokers are necessary3) Which of the following statements is FALSE?A) It is important to realize that the brokerage activity requires the broker to buy and sell or hold in inventory the financial asset that is the subject of the trade.B) A broker is an entity that acts on behalf of an investor who wishes to execute orders. In economic and legal terms, a broker is said to be an agent of the investor.C) The broker receives, transmits, and executes investors' orders with other investors.D) Services provided by brokers include research, recordkeeping, and advising.Answer: AComment: It is important to realize that the brokerage activity does not require the broker to buy and sell or hold in inventory the financial asset that is the subject of the trade.Diff: 2Topic: 14.5 Role of Brokers and Dealers in Real MarketsObjective: 14.6 why brokers are necessary4) Which of the following statements is FALSE?A) A real market might also differ from the perfect market because of the possibly frequent event of a temporary imbalance in the number of buy and sell orders that investors may place for any security at any one time.B) An unmatched or unbalanced flow of buy and sell orders causes a problem in that the security's price may change abruptly, even if there has been no shift in either supply or demand for the security.C) The fact of imbalances in buy and sell orders cannot explain the need for the dealer or market maker, who stands ready and willing to buy a financial asset for its own account (to add to an inventory of the financial asset) or sell from its own account (to reduce the inventory of the financial asset).D) An unmatched or unbalanced flow of buy and sell orders causes a problem in that buyers may have to pay higher than market-clearing prices (or sellers accept lower ones) if they want to make their trade immediately.Answer: CComment: The fact of imbalances in buy and sell orders explains the need for the dealer or market maker, who stands ready and willing to buy a financial asset for its own account (to add to an inventory of the financial asset) or sell from its own account (to reduce the inventory of the financial asset).Diff: 3Topic: 14.5 Role of Brokers and Dealers in Real MarketsObjective: 14.7 the role of a dealer as a market maker and the costs associated with market making5) The ________ can be viewed as the price charged by dealers for supplying immediacy together with short-run price stability (continuity or smoothness) in the presence of short-term order imbalances.A) bid-ask feeB) bid-ask priceC) bid-ask spreadD) bid-ask imbalanceAnswer: CDiff: 1Topic: 14.5 Role of Brokers and Dealers in Real MarketsObjective: 14.7 the role of a dealer as a market maker and the costs associated with market making6) By taking the opposite side of a trade when there are no other orders, the dealer prevents the price from ________ from the price at which a recent trade was consummated.A) materially convergingB) materially divergingC) immaterially concurringD) immaterially divergingAnswer: BDiff: 1Topic: 14.5 Role of Brokers and Dealers in Real MarketsObjective: 14.7 the role of a dealer as a market maker and the costs associated with market making7) Dealers also have to be compensated for bearing risk. A dealer's position may involve carrying inventory of a security (a long position) or selling a security that is not in inventory (a short position). There are three types of risks associated with maintaining a long or short position in a given security. Two of these include ________.A) the risk of trading with someone who has inferior information and the expected time it will take the dealer to unwind a position and its uncertainty.B) the uncertainty about the future price of the security and the expected time it will take the dealer to unwind a position and its uncertainty.C) the risk of trading with someone who has inferior information and the uncertainty about the future price of the security.D) the certainty about the future price of the security and the expected time it will take the dealer to unwind a position and its uncertainty.Answer: BComment: First, there is the uncertainty about the future price of the security. A dealer who has a net long position in the security is concerned that the price will decline in the future; a dealer who is in a net short position is concerned that the price will rise. The second type of risk has to do with the expected time it will take the dealer to unwind a position and its uncertainty. And this, in turn, depends primarily on the thickness of the market for the security. Finally, while a dealer may have access to better information about order flows than the general public, there are some trades where the dealer takes the risk of trading with someone who has better information. This results in the better-informed trader obtaining a better price at the expense of the dealer. Consequently, a dealer in establishing the bid-ask spread for a trade will assess whether or not the trader might have better information.Diff: 2Topic: 14.5 Role of Brokers and Dealers in Real MarketsObjective: 14.7 the role of a dealer as a market maker and the costs associated with market making6 Market Efficiency1) In ________, investors can obtain transaction services as cheaply as possible, given the costs associated with furnishing those services.A) an internally inefficient marketB) an externally efficient marketC) a pricing efficient marketD) an operationally efficient marketAnswer: DDiff: 2Topic: 14.6 Market EfficiencyObjective: 14.8 what is meant by the operational efficiency of a market2) In its "Big Bang" of 1986, the London Stock Exchange ________.A) abolished fixed brokerage commissions.B) abolished competitive brokerage commissions.C) adopted fixed brokerage commissions.D) shot down all types of brokerage commissions.Answer: ADiff: 2Topic: 14.6 Market EfficiencyObjective: 14.8 what is meant by the operational efficiency of a market3) Effective August 24, 2000, the minimum spread was reduced to ________ ("decimals"), with trades on all stocks in decimals beginning on August 9, 2001.A) one-eighthB) one-sixteenthC) one centD) two centsAnswer: CDiff: 2Topic: 14.6 Market EfficiencyObjective: 14.8 what is meant by the operational efficiency of a market4) ________ refers to a market where prices at all times fully reflect all available information that is relevant to the valuation of securities.A) Internal inefficiencyB) External efficiencyC) Operational efficiencyD) Pricing efficiencyAnswer: DDiff: 2Topic: 14.6 Market EfficiencyObjective: 14.9 what is meant by the pricing efficiency of a market5) Which of the below statements is TRUE?A) In a passive strategy, investors seek to capitalize on what they perceive to be the mispricing of a security or securities.B) In a market that is price efficient, active strategies will not consistently generate a return after ignoring transactions costs and the risks associated with a strategy of frequent trading.C) In a market which seems to be price efficient, one investment strategy is simply to buy and hold a broad cross section of securities in the marketD) Matching in an investment strategy that has the goal of matching the performance of some financial index from the market.Answer: CComment: A price efficient market has implications for the investment strategy that investors may wish to pursue. In an active strategy, investors seek to capitalize on what they perceive to be the mispricing of a security or securities. In a market that is price efficient, active strategies will not consistently generate a return after taking into consideration transactions costs and the risks associated with a strategy of frequent trading. The other strategy, in a market which seems to be price efficient, is simply to buy and hold a broad cross section of securities in the market. Some investors pursue this strategy through indexing, which is a policy that has the goal of matching the performance of some financial index from the market.Diff: 2Topic: 14.6 Market EfficiencyObjective: 14.10 the implications of pricing efficiency7 Electronic Trading1) Because the bond business has been ________ rather than ________ business, the capital of the market makers is critical.A) a financial; an accountingB) an accounting; a financialC) an agency; a principalD) a principal; an agencyAnswer: DDiff: 2Topic: 14.7 Electronic TradingObjective: 14.5 frictions that cause actual financial markets to differ from a perfect market2) There are several related reasons for the transition to the electronic trading of bonds. Which of the below reasons is NOT one of these?A) The profitability of bond market making has declined since many of the products have become less commodity-like.B) The increase in the volatility of bond markets has increased the capital required of bond broker-dealers.C) Making markets in bonds has become more risky for the market makers because the size of the orders has increased tremendously.D) The profitability of bond market making has declined and their bid-offer spreads have decreased.Answer: AComment: The profitability of bond market making has declined since many of the products have become more commodity-like and their bid-offer spreads have decreased.Diff: 2Topic: 14.7 Electronic TradingObjective: 14.7 the role of a dealer as a market maker and the costs associated with market making3) The same Wall Street firms that have been the major market makers in bonds have also been the ________ of electronic trading in bonds.A) cynicsB) attackersC) supportersD) detractorsAnswer: CDiff: 2Topic: 14.7 Electronic TradingObjective: 14.7 the role of a dealer as a market maker and the costs associated with market making4) There are a variety of types of electronic trading systems for bonds. The two major types of electronic trading systems are ________.A) the customer-to-dealer systems and the exchange systems.B) the dealer-to-customer systems and the leverage systems.C) the broker-to-dealer systems and the exchange systems.D) the dealer-to-customer systems and the exchange systems.Answer: DDiff: 2Topic: 14.7 Electronic TradingObjective: 14.7 the role of a dealer as a market maker and the costs associated with market making5) Which of the below statement is FALSE?A) The multi-customer system simply computerizes the traditional customer-dealer market making mechanism.B) Single-dealer systems are based on a customer dealing with a single, identified dealer over the computer.C) Dealer-to-customer systems can be a single-dealer system or multiple-dealer system.D) Multi-dealer systems provide some advancement over the single- dealer method since a customer can select from any of several identified dealers whose bids and offers are provided on a computer screen.Answer: AComment: The single-dealer system simply computerizes the traditional customer-dealer market making mechanism.Diff: 2Topic: 14.7 Electronic TradingObjective: 14.7 the role of a dealer as a market maker and the costs associated with market making6) Among the overall advantages of electronic trading are ________.A) providing liquidity to the government.B) price discovery (particularly for less liquid markets).C) utilization of old technologies.D) trading and portfolio management inefficiencies.Answer: BComment: Among the overall advantages of electronic trading are (1) providing liquidity to the markets, (2) price discovery (particularly for less liquid markets), (3) utilization of new technologies, and (4) trading and portfolio management efficiencies.Diff: 1Topic: 14.7 Electronic TradingObjective: 14.12 the implications of pricing efficiency for market participants7) Which of the below statement is FALSE?A) According to the exchange system, dealer and customer bids and offers are entered into the system on an anonymous basis, and the clearing of the executed trades is done through a common process.B) Although there is a common clearinghouse for bonds, there is none for common stocks.C) According to the exchange system, dealer and customer bids and offers are entered into the system on an anonymous basis, and the clearing of the executed trades is done through a common process.D) The exchange system is quite different rom the dealer-to-customer systems and has potentially significantly greater value added.Answer: BComment: Although there is a common clearinghouse for common stocks (Depository Trust Company), there is none for bonds.Diff: 2Topic: 14.7 Electronic TradingObjective: 14.7 the role of a dealer as a market maker and the costs associated with market makingTrue/False Questions1 Function of Secondary Markets1) Primary markets help the issuer of securities to track their values and required returns. Answer: FALSEComment: Secondary markets help the issuer of securities to track their values and required returns.Diff: 1Topic: 14.1 Function of Secondary MarketsObjective: 14.1 the definition of a secondary market2) Secondary markets hurt investors by providing liquidity.Answer: FALSEComment: Secondary markets benefit investors by providing liquidity.Diff: 1Topic: 14.1 Function of Secondary MarketsObjective: 14.12 the implications of pricing efficiency for market participants2 Trading Locations1) In the United States, secondary trading of common shares are traded on major national stock exchanges and regional stock exchanges, which are organized and somewhat regulated markets in specific geographical locations.Answer: TRUEDiff: 1Topic: 14.2 Trading LocationsObjective: 14.11 the different forms of pricing efficiency2) The dominant OTC market for stocks in the United States is AMEX.Answer: FALSEComment: The dominant OTC market for stocks in the United States is Nasdaq.Diff: 1Topic: 14.2 Trading LocationsObjective: 14.2 the need for secondary markets for financial assets3 Market Structures1) Some markets conduct the day's initial trades with a call method and most other trades in a continuous way.Answer: TRUEDiff: 1Topic: 14.3 Market StructuresObjective: 14.3 the difference between a continuous and a call market2) In a call market, the auction may be oral but not written.Answer: FALSEComment: In a call market, the auction may be oral or writte n.Diff: 1Topic: 14.3 Market StructuresObjective: 14.3 the difference between a continuous and a call market4 Perfect Markets1) Suppose that an investor expects that the price her security will decline. She can still benefit should the price actually decline if she can arrange to sell the security without owning it. Answer: TRUEDiff: 1Topic: 14.4 Perfect MarketsObjective: 14.12 the implications of pricing efficiency for market participants2) A perfect market does not allow the sale of borrowed securities.Answer: FALSEComment: A perfect market must also permit short selling, which is the sale of borrowed securities.Diff: 1Topic: 14.4 Perfect MarketsObjective: 14.4 the requirements of a perfect market5 Role of Brokers and Dealers in Real Markets1) A dealer acts as an auctioneer in all market structures, thereby providing order and fairness in the operations of the market.Answer: FALSEComment: A dealer acts as an auctioneer in some market structures, thereby providing order and fairness in the operations of the market.Diff: 1Topic: 14.5 Role of Brokers and Dealers in Real MarketsObjective: 14.7 the role of a dealer as a market maker and the costs associated with market making。
金融学基础——金融市场与金融中介
推导单个风险资产的收益决定
风险资产预期收益率的构成
套用CML的数学公式
ri
rf
rm rf
m
i,m m
定义证券i的市场风险溢价系数
30
对EMH的质疑
经济主体具有完全理性吗？
损失厌恶心理 “小数定律” 禀赋效应和自我强化机制
经济主体的偏好稳定吗？
处境效应
经济主体始终坚持最大化自利原则吗？
互惠利他
31
行为金融学的挑战
核心观点
现实生活中的经济行为人，是有限理性、有限 控制力和有限自利的
努力方向
试图在经典的经济学分析框架中引入人类行为 的丰富性
a,b cov(ra , rb ) 12(%)2
p
(
1 2
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2 a
(
1 2
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2
2 b
2
1 2
1 2
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5.88%
通过组合实现了比低收益 资产更高的收益，比高风险 资产更低的风险
43
关于分散化的两个问题
问题I：为什么组合投资能降低风险？
定义相关系数
i, j
cor(ri , rj )
A 30 10 -10 10 12.65 B 7 6 10 7 1.55
40
两资产组合的风险度量
不仅取决于每一资产的收益波动性，同时还取 决于各资产收益波动之间的相关程度
任意两资产收益的协方差
n
i, j cov(ri , rj ) (rik ri )(rjk rj ) pk k 1
37
–预期收益的概率分布与期望
明天天气
出现概率 收益结果
75% 25% 12% 8%
n
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Foundations of Financial Markets and Institutions, 4e (Fabozzi/Modigliani/Jones)Chapter 14 Secondary MarketsMultiple Choice Questions1 Function of Secondary Markets1) The key distinction between a primary market and a secondary market is that, in the secondary market, ________.A) funds flow from the seller of the asset to the buyer.B) the issuer of the asset receives funds from the buyer.C) funds flow from the buyer of the asset to the seller.D) the existing issue changes hands in the primary market.Answer: CComment: The key distinction between a primary market and a secondary market is that, in the secondary market, the issuer of the asset does not receive funds from the buyer. Rather, the existing issue changes hands in the secondary market, and funds flow from the buyer of the asset to the seller.Diff: 2Topic: 14.1 Function of Secondary MarketsObjective: 14.1 the definition of a secondary market2) Without a secondary market, issuers would be unable to ________, or they would have to paya higher rate of return, as investors would ________ in compensation for expected illiquidity in the securities.A) sell new securities; increase the discount rateB) sell new securities; decrease the discount rateC) buy new securities; decrease the priceD) sell new securities; increase the priceAnswer: ADiff: 2Topic: 14.1 Function of Secondary MarketsObjective: 14.12 the implications of pricing efficiency for market participants3) Investors in financial assets receive ________.A) illiquidity for their assets.B) information about the assets' fair or consensus values.C) increased the costs of searching for likely buyers and sellers of assets.D) the disadvantage of higher transaction costs.Answer: BComment: Investors in financial assets receive several benefits from a secondary market. Such a market obviously offers them liquidity for their assets as well as information about the assets’ fair or consensus values. Furthermore, secondary markets bring together many interested parties and thereby reduce the costs of searching for likely buyers and sellers of assets. Moreover, by accommodating many trades, secondary markets keep the cost of transactions low. By keeping the costs of both searching and transacting low, secondary markets encourage investors to purchase financial assets.Diff: 2Topic: 14.1 Function of Secondary MarketsObjective: 14.12 the implications of pricing efficiency for market participants2 Trading Locations1) One indication of the usefulness of secondary markets is that they exist throughout ________.A) the United States.B) Europe and Asia.C) each state.D) the world.Answer: DDiff: 1Topic: 14.2 Trading LocationsObjective: 14.2 the need for secondary markets for financial assets2) In the United States, secondary trading of common stock occurs ________.A) in a number of trading locations.B) in Dallas, Texas.C) in each major city.D) None of theseAnswer: ADiff: 1Topic: 14.2 Trading LocationsObjective: 14.2 the need for secondary markets for financial assets3) Which of the below statements is TRUE?A) In the United States, secondary shares are traded on major national stock exchanges (the largest of which is the American Stock Exchange) and regional stock exchanges.B) In the United States, significant trading in stock takes place on the so-called over-the-counter or OTC market, which involves specific geographical locations.C) In the United States, the dominant OTC market for stocks in the United States is the New York Stock Exchange.D) In the United States, some bonds are traded on exchanges, but most trading in bonds in the United States and throughout the world occurs in the OTC market.Answer: DComment: In the United States, secondary trading of common stock occurs in a number of trading locations. Many shares are traded on major national stock exchanges (the largest of which is the New York Stock Exchange) and regional stock exchanges, which are organized and somewhat regulated markets in specific geographical locations. Additional significant trading in stock takes place on the so-called over-the-counter or OTC market, which is a geographically dispersed group of traders linked to one another via telecommunication systems. The dominant OTC market for stocks in the United States is Nasdaq. Some bonds are traded on exchanges, but most trading in bonds in the United States and throughout the world occurs in the OTC market.Diff: 2Topic: 14.2 Trading LocationsObjective: 14.2 the need for secondary markets for financial assets3 Market Structures1) In a continuous market, prices may vary ________.A) because of the basic situation of supply and demand.B) are determined discontinuously throughout the trading day.C) are determined continuously throughout the trading day even if buyers and sellers are not submitting orders.D) with the pattern of orders reaching the market.Answer: DComment: Many secondary markets are continuous, which means that prices are determined continuously throughout the trading day as buyers and sellers submit orders. For example, given the order flow at 10:00 A.M., the market clearing price of a stock on some organized stock exchange may be $70; at 11:00 A.M. of the same trading day, the market-clearing price of the same stock, but with different order flows, may be $70.75. Thus, in a continuous market, prices may vary with the pattern of orders reaching the market and not because of any change in the basic situation of supply and demand.Diff: 2Topic: 14.3 Market StructuresObjective: 14.3 the difference between a continuous and a call market2) ________, orders are grouped together for simultaneous execution at the same price.A) In a bull marketB) In an efficient marketC) In a call marketD) In a bear marketAnswer: CDiff: 2Topic: 14.3 Market StructuresObjective: 14.3 the difference between a continuous and a call market3) Which of the below statements is FALSE?A) In a call market, a market maker holds an auction for a stock at certain times in the trading day (or possibly more than once in a day).B) Many secondary markets are continuous, which means that prices are determined continuously throughout the trading day as buyers and sellers submit orders.C) In a call market, a market maker holds an auction for a stock at the same time each day.D) An auction in a call market may be oral or written.Answer: CComment: In a call market, a market maker holds an auction for a stock at certain times in the trading day (or possibly more than once in a day).Diff: 2Topic: 14.3 Market StructuresObjective: 14.3 the difference between a continuous and a call market4 Perfect Markets1) Perfect market results when ________.A) the number of buyers and sellers is sufficiently small, and all participants are small enough relative to the market so that no individual market agent can influence the commodity's price. B) the number of buyers and sellers is sufficiently large, and all participants are small enough relative to the market so that all individual market agent can influence the commodity's price. C) the number of buyers and sellers is sufficiently large, and all participants are small enough relative to the market so that no individual market agent can influence the commodity's price. D) the number of buyers and sellers is sufficiently small, and all participants are small enough relative to the market so that all individual market agent can influence the commodity's price. Answer: CComment: In general, a perfect market results when the number of buyers and sellers is sufficiently large, and all participants are small enough relative to the market so that no individual market agent can influence the commodity’s price.Diff: 2Topic: 14.4 Perfect MarketsObjective: 14.4 the requirements of a perfect market2) A perfect market results when all buyers and sellers are ________, and the market price is determined where there is ________.A) price-takers; equality of supply and demand.B) price-makers; equality of supply and demand.C) price-takers; inequality of supply and demand.D) price-makers; inequality of supply and demand.Answer: ADiff: 2Topic: 14.4 Perfect MarketsObjective: 14.4 the requirements of a perfect market3) A market is not perfect only because market agents are price takers but is also free of transactions costs and any impediment to the interaction of supply and demand for the commodity. Economists refer to these various costs and impediments as frictions. Frictions include ________.A) bid-ask spreads charged by dealers and order handling and clearance charges.B) taxes (but not on capital gains) and government-imposed transfer fees.C) costs of acquiring information about the financial asset and restrictions on market takers.D) financial liability that a buyer or seller may take and taxes on capital gains.Answer: AComment: A market is not perfect only because market agents are price takers. A perfect market is also free of transactions costs and any impediment to the interaction of supply and demand for the commodity. Economists refer to these various costs and impediments as frictions. The costs associated with frictions generally result in buyers paying more than in the absence of frictions and/or in sellers receiving less commissions charged by brokers. Frictions include: bid—ask spreads charged by dealers.order handling and clearance charges.taxes (notably on capital gains) and government-imposed transfer fees.costs of acquiring information about the financial asset.trading restrictions, such as exchange-imposed restrictions on the size of a position in the financial asset that a buyer or seller may take.restrictions on market makers.halts to trading that may be imposed by regulators where the financial asset is traded.Diff: 2Topic: 14.4 Perfect MarketsObjective: 14.4 the requirements of a perfect market4) This practice of selling securities that are not owned at the time of sale is referred to as________.A) buying short.B) selling short.C) selling long.D) buying and selling simultaneously.Answer: BDiff: 2Topic: 14.4 Perfect MarketsObjective: 14.4 the requirements of a perfect market5) In the absence of an effective short-selling mechanism, security prices will tend to be biased toward the ________, causing a market to depart from the standards of a perfect price-setting situation.A) view of more pessimistic investorsB) view of the market makerC) view of more optimistic investorsD) view of the market takerAnswer: CDiff: 2Topic: 14.4 Perfect MarketsObjective: 14.4 the requirements of a perfect market5 Role of Brokers and Dealers in Real markets1) ________ are necessary to the smooth functioning of a secondary market.A) Inexperienced investorsB) Initial public offeringsC) Investment bankersD) Brokers and dealersAnswer: DDiff: 2Topic: 14.5 Role of Brokers and Dealers in Real MarketsObjective: 14.6 why brokers are necessary2) Investors need brokers to help ________.A) execute their orders.B) find other parties wishing to sell or buy.C) negotiate for good prices.D) All of theseAnswer: DComment: Investors need brokers to receive and keep track of their orders for buying or selling, to find other parties wishing to sell or buy, to negotiate for good prices, to serve as a focal point for trading, and to execute the orders.Diff: 1Topic: 14.5 Role of Brokers and Dealers in Real MarketsObjective: 14.6 why brokers are necessary3) Which of the following statements is FALSE?A) It is important to realize that the brokerage activity requires the broker to buy and sell or hold in inventory the financial asset that is the subject of the trade.B) A broker is an entity that acts on behalf of an investor who wishes to execute orders. In economic and legal terms, a broker is said to be an agent of the investor.C) The broker receives, transmits, and executes investors' orders with other investors.D) Services provided by brokers include research, recordkeeping, and advising.Answer: AComment: It is important to realize that the brokerage activity does not require the broker to buy and sell or hold in inventory the financial asset that is the subject of the trade.Diff: 2Topic: 14.5 Role of Brokers and Dealers in Real MarketsObjective: 14.6 why brokers are necessary4) Which of the following statements is FALSE?A) A real market might also differ from the perfect market because of the possibly frequent event of a temporary imbalance in the number of buy and sell orders that investors may place for any security at any one time.B) An unmatched or unbalanced flow of buy and sell orders causes a problem in that the security's price may change abruptly, even if there has been no shift in either supply or demand for the security.C) The fact of imbalances in buy and sell orders cannot explain the need for the dealer or market maker, who stands ready and willing to buy a financial asset for its own account (to add to an inventory of the financial asset) or sell from its own account (to reduce the inventory of the financial asset).D) An unmatched or unbalanced flow of buy and sell orders causes a problem in that buyers may have to pay higher than market-clearing prices (or sellers accept lower ones) if they want to make their trade immediately.Answer: CComment: The fact of imbalances in buy and sell orders explains the need for the dealer or market maker, who stands ready and willing to buy a financial asset for its own account (to add to an inventory of the financial asset) or sell from its own account (to reduce the inventory of the financial asset).Diff: 3Topic: 14.5 Role of Brokers and Dealers in Real MarketsObjective: 14.7 the role of a dealer as a market maker and the costs associated with market making5) The ________ can be viewed as the price charged by dealers for supplying immediacy together with short-run price stability (continuity or smoothness) in the presence of short-term order imbalances.A) bid-ask feeB) bid-ask priceC) bid-ask spreadD) bid-ask imbalanceAnswer: CDiff: 1Topic: 14.5 Role of Brokers and Dealers in Real MarketsObjective: 14.7 the role of a dealer as a market maker and the costs associated with market making6) By taking the opposite side of a trade when there are no other orders, the dealer prevents the price from ________ from the price at which a recent trade was consummated.A) materially convergingB) materially divergingC) immaterially concurringD) immaterially divergingAnswer: BDiff: 1Topic: 14.5 Role of Brokers and Dealers in Real MarketsObjective: 14.7 the role of a dealer as a market maker and the costs associated with market making7) Dealers also have to be compensated for bearing risk. A dealer's position may involve carrying inventory of a security (a long position) or selling a security that is not in inventory (a short position). There are three types of risks associated with maintaining a long or short position in a given security. Two of these include ________.A) the risk of trading with someone who has inferior information and the expected time it will take the dealer to unwind a position and its uncertainty.B) the uncertainty about the future price of the security and the expected time it will take the dealer to unwind a position and its uncertainty.C) the risk of trading with someone who has inferior information and the uncertainty about the future price of the security.D) the certainty about the future price of the security and the expected time it will take the dealer to unwind a position and its uncertainty.Answer: BComment: First, there is the uncertainty about the future price of the security. A dealer who has a net long position in the security is concerned that the price will decline in the future; a dealer who is in a net short position is concerned that the price will rise. The second type of risk has to do with the expected time it will take the dealer to unwind a position and its uncertainty. And this, in turn, depends primarily on the thickness of the market for the security. Finally, while a dealer may have access to better information about order flows than the general public, there are some trades where the dealer takes the risk of trading with someone who has better information. This results in the better-informed trader obtaining a better price at the expense of the dealer. Consequently, a dealer in establishing the bid-ask spread for a trade will assess whether or not the trader might have better information.Diff: 2Topic: 14.5 Role of Brokers and Dealers in Real MarketsObjective: 14.7 the role of a dealer as a market maker and the costs associated with market making6 Market Efficiency1) In ________, investors can obtain transaction services as cheaply as possible, given the costs associated with furnishing those services.A) an internally inefficient marketB) an externally efficient marketC) a pricing efficient marketD) an operationally efficient marketAnswer: DDiff: 2Topic: 14.6 Market EfficiencyObjective: 14.8 what is meant by the operational efficiency of a market2) In its "Big Bang" of 1986, the London Stock Exchange ________.A) abolished fixed brokerage commissions.B) abolished competitive brokerage commissions.C) adopted fixed brokerage commissions.D) shot down all types of brokerage commissions.Answer: ADiff: 2Topic: 14.6 Market EfficiencyObjective: 14.8 what is meant by the operational efficiency of a market3) Effective August 24, 2000, the minimum spread was reduced to ________ ("decimals"), with trades on all stocks in decimals beginning on August 9, 2001.A) one-eighthB) one-sixteenthC) one centD) two centsAnswer: CDiff: 2Topic: 14.6 Market EfficiencyObjective: 14.8 what is meant by the operational efficiency of a market4) ________ refers to a market where prices at all times fully reflect all available information that is relevant to the valuation of securities.A) Internal inefficiencyB) External efficiencyC) Operational efficiencyD) Pricing efficiencyAnswer: DDiff: 2Topic: 14.6 Market EfficiencyObjective: 14.9 what is meant by the pricing efficiency of a market5) Which of the below statements is TRUE?A) In a passive strategy, investors seek to capitalize on what they perceive to be the mispricing of a security or securities.B) In a market that is price efficient, active strategies will not consistently generate a return after ignoring transactions costs and the risks associated with a strategy of frequent trading.C) In a market which seems to be price efficient, one investment strategy is simply to buy and hold a broad cross section of securities in the marketD) Matching in an investment strategy that has the goal of matching the performance of some financial index from the market.Answer: CComment: A price efficient market has implications for the investment strategy that investors may wish to pursue. In an active strategy, investors seek to capitalize on what they perceive to be the mispricing of a security or securities. In a market that is price efficient, active strategies will not consistently generate a return after taking into consideration transactions costs and the risks associated with a strategy of frequent trading. The other strategy, in a market which seems to be price efficient, is simply to buy and hold a broad cross section of securities in the market. Some investors pursue this strategy through indexing, which is a policy that has the goal of matching the performance of some financial index from the market.Diff: 2Topic: 14.6 Market EfficiencyObjective: 14.10 the implications of pricing efficiency7 Electronic Trading1) Because the bond business has been ________ rather than ________ business, the capital of the market makers is critical.A) a financial; an accountingB) an accounting; a financialC) an agency; a principalD) a principal; an agencyAnswer: DDiff: 2Topic: 14.7 Electronic TradingObjective: 14.5 frictions that cause actual financial markets to differ from a perfect market2) There are several related reasons for the transition to the electronic trading of bonds. Which of the below reasons is NOT one of these?A) The profitability of bond market making has declined since many of the products have become less commodity-like.B) The increase in the volatility of bond markets has increased the capital required of bond broker-dealers.C) Making markets in bonds has become more risky for the market makers because the size of the orders has increased tremendously.D) The profitability of bond market making has declined and their bid-offer spreads have decreased.Answer: AComment: The profitability of bond market making has declined since many of the products have become more commodity-like and their bid-offer spreads have decreased.Diff: 2Topic: 14.7 Electronic TradingObjective: 14.7 the role of a dealer as a market maker and the costs associated with market making3) The same Wall Street firms that have been the major market makers in bonds have also been the ________ of electronic trading in bonds.A) cynicsB) attackersC) supportersD) detractorsAnswer: CDiff: 2Topic: 14.7 Electronic TradingObjective: 14.7 the role of a dealer as a market maker and the costs associated with market making4) There are a variety of types of electronic trading systems for bonds. The two major types of electronic trading systems are ________.A) the customer-to-dealer systems and the exchange systems.B) the dealer-to-customer systems and the leverage systems.C) the broker-to-dealer systems and the exchange systems.D) the dealer-to-customer systems and the exchange systems.Answer: DDiff: 2Topic: 14.7 Electronic TradingObjective: 14.7 the role of a dealer as a market maker and the costs associated with market making5) Which of the below statement is FALSE?A) The multi-customer system simply computerizes the traditional customer-dealer market making mechanism.B) Single-dealer systems are based on a customer dealing with a single, identified dealer over the computer.C) Dealer-to-customer systems can be a single-dealer system or multiple-dealer system.D) Multi-dealer systems provide some advancement over the single- dealer method since a customer can select from any of several identified dealers whose bids and offers are provided on a computer screen.Answer: AComment: The single-dealer system simply computerizes the traditional customer-dealer market making mechanism.Diff: 2Topic: 14.7 Electronic TradingObjective: 14.7 the role of a dealer as a market maker and the costs associated with market making6) Among the overall advantages of electronic trading are ________.A) providing liquidity to the government.B) price discovery (particularly for less liquid markets).C) utilization of old technologies.D) trading and portfolio management inefficiencies.Answer: BComment: Among the overall advantages of electronic trading are (1) providing liquidity to the markets, (2) price discovery (particularly for less liquid markets), (3) utilization of new technologies, and (4) trading and portfolio management efficiencies.Diff: 1Topic: 14.7 Electronic TradingObjective: 14.12 the implications of pricing efficiency for market participants7) Which of the below statement is FALSE?A) According to the exchange system, dealer and customer bids and offers are entered into the system on an anonymous basis, and the clearing of the executed trades is done through a common process.B) Although there is a common clearinghouse for bonds, there is none for common stocks.C) According to the exchange system, dealer and customer bids and offers are entered into the system on an anonymous basis, and the clearing of the executed trades is done through a common process.D) The exchange system is quite different rom the dealer-to-customer systems and has potentially significantly greater value added.Answer: BComment: Although there is a common clearinghouse for common stocks (Depository Trust Company), there is none for bonds.Diff: 2Topic: 14.7 Electronic TradingObjective: 14.7 the role of a dealer as a market maker and the costs associated with market makingTrue/False Questions1 Function of Secondary Markets1) Primary markets help the issuer of securities to track their values and required returns. Answer: FALSEComment: Secondary markets help the issuer of securities to track their values and required returns.Diff: 1Topic: 14.1 Function of Secondary MarketsObjective: 14.1 the definition of a secondary market2) Secondary markets hurt investors by providing liquidity.Answer: FALSEComment: Secondary markets benefit investors by providing liquidity.Diff: 1Topic: 14.1 Function of Secondary MarketsObjective: 14.12 the implications of pricing efficiency for market participants2 Trading Locations1) In the United States, secondary trading of common shares are traded on major national stock exchanges and regional stock exchanges, which are organized and somewhat regulated markets in specific geographical locations.Answer: TRUEDiff: 1Topic: 14.2 Trading LocationsObjective: 14.11 the different forms of pricing efficiency2) The dominant OTC market for stocks in the United States is AMEX.Answer: FALSEComment: The dominant OTC market for stocks in the United States is Nasdaq.Diff: 1Topic: 14.2 Trading LocationsObjective: 14.2 the need for secondary markets for financial assets3 Market Structures1) Some markets conduct the day's initial trades with a call method and most other trades in a continuous way.Answer: TRUEDiff: 1Topic: 14.3 Market StructuresObjective: 14.3 the difference between a continuous and a call market2) In a call market, the auction may be oral but not written.Answer: FALSEComment: In a call market, the auction may be oral or writte n.Diff: 1Topic: 14.3 Market StructuresObjective: 14.3 the difference between a continuous and a call market4 Perfect Markets1) Suppose that an investor expects that the price her security will decline. She can still benefit should the price actually decline if she can arrange to sell the security without owning it. Answer: TRUEDiff: 1Topic: 14.4 Perfect MarketsObjective: 14.12 the implications of pricing efficiency for market participants2) A perfect market does not allow the sale of borrowed securities.Answer: FALSEComment: A perfect market must also permit short selling, which is the sale of borrowed securities.Diff: 1Topic: 14.4 Perfect MarketsObjective: 14.4 the requirements of a perfect market5 Role of Brokers and Dealers in Real Markets1) A dealer acts as an auctioneer in all market structures, thereby providing order and fairness in the operations of the market.Answer: FALSEComment: A dealer acts as an auctioneer in some market structures, thereby providing order and fairness in the operations of the market.Diff: 1Topic: 14.5 Role of Brokers and Dealers in Real MarketsObjective: 14.7 the role of a dealer as a market maker and the costs associated with market making。