91. Which from the following is not the role of an underwriter?
(A) They provide procedural and financial advice
(B) They buy the issue
(C) They resell the issue to the public
(D) They provide funds to the corporation

92. Risk __________ with the duration of bond.
(A) remains same
(B) increases
(C) decreases
(D) multiplied

93. The difference between the public-offer price and the price paid by the underwriter is called
(A) underpricing
(B) spread
(C) commission
(D) margin

94. The underwriters receive their payments in the shape of
(A) underpricing
(B) spread
(C) commission
(D) margin

95. Rights issues are for
(A) managers
(B) directors
(C) existing shareholders
(D) new shareholders

96. The interest rate earned if a financial asset is held until its maturity is called

(A) term structure
(B) spinning
(C) yield
(D) spread

97. The price of a stock is $100, and it could be $95 or $115 the next year. What is the expected return?
(A) 5%
(B) 6%
(C) 7%
(D) 7.5%

98. The price of a stock is $100, and there are 40% chances that it would be $95 and 60% chances that it would be $115 the next year. What is the expected return?
(A) 5%
(B) 6%
(C) 7%
(D) 7.5%

99. A company’s agreement with the underwriter include
(A) spread
(B) green shoe option
(C) A and B
(D) white shoe option

100. The long-run returns of Initial Public Offerings (IPOs) tend to __________ the market.

(A) underperform
(B) accelerate
(C) amplify
(D) none of these

NOTE
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