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85. Which one of these enterprises generally acts as an underwriter for an initial public
offering?
86. Approximately what percent of the shares issued by U.S. corporations are held by
investors outside of the U.S.?
87. Firms can often determine the current price of any commodities they use in their
production process by consulting the price quotes provided by:
88. How is the relationship between a bond's credit rating and its interest rate best defined?
89. The financial crisis of 2007-2009 contributed to the largest sovereign default in history by
which one of these countries?
90. Which one of these was a contributing factor to the need for many foreign banks to seek
aid from their governments as a result of the financial crisis of 2007-2009?
91. Which one of these was a major cause of the deep recession and severe unemployment
throughout much of Europe that followed the financial crisis of 2007-2009?
92. Which one of these is generally a key difference between U.S. and foreign commercial
banks?
93. How can an individual save and invest in a corporation?
94. Why are secondary market transactions of importance to corporations?
95. What is meant by over-the-counter trading?
96. Describe the distinguishing characteristics of the major financial markets.
97. What are the advantages of investing indirectly in stocks and bonds via mutual funds and
pension funds?
98. What are the key differences between a financial intermediary and a financial
institution?
99. What are the largest institutional investors in bonds? In stocks?
100. What are the functions of financial markets?
101. How can the financial manager identify the cost of the capital raised by a corporation?
102. Why do nonfinancial corporations need modern financial markets and institutions?
103. How was the role of many bankers in the Financial Crisis of 2007-2009 an example of an
agency problem?
104. Investing $100,000 in additional raw materials today—mostly in palladium—should allow
Cryogenic Concepts to increase production and earn an additional $112,000 next year. This
payoff would cover the investment today, plus a 12% return. Palladium is traded in commodity
markets. The CFO has studied the history of returns on investments in palladium and believes
that investors in that precious metal can reasonably expect a 15% return. Is Cryogenic's
investment in palladium a good idea? Why or why not?
105. Rhonda and Reggie Hotspur are working hard to save for their children's college
educations. They don't need more cash for current consumption but will face big tuition bills in
2020. Should they therefore avoid investing in stocks that pay generous current cash dividends?
Explain briefly.
106. What is an exchange traded fund? What are some popular choices of exchange traded
funds?
107. What are subprime mortgages and how were they a part of the Financial Crisis of 2007-
2009?
