Issuing Capital And The Investment Banking Process

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Question 1

Free

Multiple Choice

Which of the following is the type of financing that includes capital funds borrowed from personal savings, friends and relatives, financial institutions such as commercial banks, or venture capitalists?

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Debt financing

Equity financing

Public financing

Capital financing

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Question 2

Free

Multiple Choice

Which of the following is the type of financing that includes capital funds invested or venture capitalists?

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Debt financing

Equity financing

Public financing

Capital financing

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Question 3

Free

Multiple Choice

Which of the following best describes the type of financing provided by government agencies such as the Small Business Administration?

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Debt financing

Equity financing

Public sources of financing

Capital financing

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Question 4

Free

Multiple Choice

Which of these is the type of loan where the firm would receive the funds as soon as the bank approved the loan?

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Loan commitment agreements

Spot loans

Take-down loans

Back-end loans

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Question 5

Free

Multiple Choice

Which of these is the type of loan where the firm borrows against pre-negotiated lines of credit or loan commitments?

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Loan commitment agreements

Spot loans

Take-down loans

Back-end loans

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Question 6

Multiple Choice

Which of these is a contractual commitment to loan the firm a certain maximum amount at a given interest rate?

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Loan commitment agreements

Spot loans

Take-down loans

Back-end loans

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Question 7

Multiple Choice

Which of these is the fee charged by a bank for making funds available through a loan commitment?

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Back-end (or commitment) fee

Simple interest expense

Discounted interest

Up-front (or facility) fees

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Question 8

Multiple Choice

Which of these is the fee charged by a bank on any unused balances of a loan commitment line at the end of the loan commitment period?

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Back-end (or commitment) fee

Simple interest expense

Discounted interest

Up-front (or facility) fees

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Question 9

Multiple Choice

Which of these is the type of loan where the firm makes fixed interest payments over the life of the loan?

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Fixed-rate loans

Variable-rate loans

Take-down loans

Spot loans

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Question 10

Multiple Choice

Which of these is the type of loan where the interest payments change over the life of the loan?

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Fixed-rate loans

Variable-rate loans

Take-down loans

Spot loans

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Question 11

Multiple Choice

Which of these is defined as a professionally managed pool of money used to finance new and often high-risk firms?

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Equity capital

Debt capital

Venture capital

Expertise capital

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Question 12

Multiple Choice

Which of the following describes the type of venture capital firms whose sole purpose is to find and fund the most promising new firms?

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Blue chip venture capital firms

Institutional venture capital firms

Angel venture capitalists

Expertise venture capitalists

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Question 13

Multiple Choice

Which of the following describes the type of venture capital firms who are wealthy individuals who make equity investments?

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Blue chip venture capital firms

Institutional venture capital firms

Angel venture capitalists

Expertise venture capitalists

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Question 14

Multiple Choice

Which of the following is the firm allowing its equity, some of which was held privately by managers and venture capital investors, to be publicly traded in stock markets for the first time?

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Over the counter market transaction

Private market transaction

Initial public offering

Public market transaction

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Question 15

Multiple Choice

Which of the following is an unsecured short-term promissory note issued by a public firm to raise short-term cash, often to finance working capital requirements?

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Initial public offering

Angel capital

Venture capital

Commercial paper

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Question 16

Multiple Choice

Which of the following is a security issue in which the investment bank guarantees the issuer a price for newly issued securities by buying the whole issue at a fixed price from the security issuer, and where the investment bank then seeks to resell the securities to investors at a higher price?

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Best efforts underwriting

Firm commitment underwriting

Underwriter's spread

Venture capital

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Question 17

Multiple Choice

Which of the following is a security issue in which the underwriter does not guarantee a firm price to the issuer and acts more as a placing or distribution agent for a fee?

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Best efforts underwriting

Firm commitment underwriting

Underwriter's spread

Venture capital

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Question 18

Multiple Choice

Which of the following refers to when the bond issuing firm invites bids from a number of underwriters?

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Competitive sale

Negotiated sale

Commercial sale

Auction

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Question 19

Multiple Choice

Which of the following refers to when a single investment bank obtains the exclusive right to originate, underwrite, and distribute the new bonds through a one-on-one negotiation process?

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Competitive sale

Negotiated sale

Commercial sale

Silent auction sale

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Question 20

Multiple Choice

Which of these are the markets in which corporations raise funds through new stock issues?

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Primary

Secondary

Commercial

Over the counter

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