Financial Management - Study Mode
[#756] A regulatory body which licenses brokers and oversees traders is classified as
Correct Answer
(D) national association of securities dealers
Explanation
Solution: A regulatory body which licenses brokers and oversees traders is classified as national association of securities dealers. A regulatory body is like a professional body but it is not a membership organisation and its primary activity is to protect the public.
[#757] Companies take savings as premium, invest in bonds and make payments to beneficiaries are classified as
Correct Answer
(B) life insurance companies
Explanation
Solution: Companies take savings as premium, invest in bonds and make payments to beneficiaries are classified as life insurance companies.
[#758] Mutual fund allows investors to sale out their share during any normal trading hours is classified as
Correct Answer
(A) exchange traded fund
Explanation
Solution: Mutual fund allows investors to sale out their share during any normal trading hours is classified as exchange traded fund. Exchange Traded Funds (ETFs) are mutual funds listed and traded on stock exchanges like shares. Index ETFs are created by institutional investors swapping shares in an index basket, for units in the fund.
[#759] Step in initial public offering in which hired agents act on behalf of owners is classified as
Correct Answer
(B) agency problems
Explanation
Solution: Step in initial public offering in which hired agents act on behalf of owners is classified as agency problems. The agency problem is a conflict of interest inherent in any relationship where one party is expected to act in another's best interests. In corporate finance, the agency problem usually refers to a conflict of interest between a company's management and the company's stockholders.
[#760] Financial security which is tax exempted and issues by state governments to individuals is classified as
Correct Answer
(C) municipal bonds
Explanation
Solution: Financial security which is tax exempted and issues by state governments to individuals is classified as municipal bonds. Municipal bonds are loans investors make to local governments. They are issued by cities, states, counties, or other local governments. For that reason, the interest they pay on the bonds is tax-free.