Which of the following statements is FALSE?A.Venture capital firms do not make outright loans.B.Securities firms specialize in the trading and brokerage of existing securities.C.The value of assets is the traditional measure of size in the securities brokerage and investment banking industry. D.Investment banks specialize in the raising of debt and equity securities for corporations and governments.E.Securities firms and investment banks perform only the brokerage function.

QUESTION 1Which of the following statements is FALSE?A.Securities firms and investment banks perform only the brokerage function.B.Venture capital firms do not make outright loans.C.The value of assets is the traditional measure of size in the securities brokerage and investment banking industry. D.Investment banks specialize in the raising of debt and equity securities for corporations and governments.E.Securities firms specialize in the trading and brokerage of existing securities.1 points   QUESTION 2AllStarBank has the following balance sheet (in millions):          Assets                                         Liabilities and Equity         Cash                $30            Deposits                                $110         Loans                90            Borrowed funds                       40         Securities         50            Equity                                         20        Total assets    $170            Total liabilities and equity   $170AllStarBank’s largest customer decides to exercise a $15 million loan commitment. How will the new balance sheet appear if AllStar uses the purchased liquidity management liquidity?A.                    Assets                               Liabilities and Equity                                Cash                         $30            Deposits                                $110         Loans                       105            Borrowed funds                       55         Securities                  50             Equity                                        20              Total assets     $185             Total liabilities and equity  $185B.                    Assets                               Liabilities and Equity                                Cash                         $30            Deposits                                $105         Loans                         75            Borrowed funds                       55            Securities                80            Equity                                        25                Total assets     $185           Total liabilities and equity   $185C.                               Assets                               Liabilities and Equity                 Cash                         $15            Deposits                                $110         Loans                       105            Borrowed funds                       55         Securities                   50            Equity                                          5       Total assets            $170            Total liabilities and equity    $170D.                    Assets                               Liabilities and Equity                                Cash                         $30            Deposits                                $110         Loans                         75            Borrowed funds                       55            Securities                80            Equity                                        20                Total assets     $185           Total liabilities and equity   $185E.                               Assets                               Liabilities and Equity                 Cash                         $15            Deposits                                $110         Loans                       105            Borrowed funds                       40         Securities                   50            Equity                                       20       Total assets            $170            Total liabilities and equity    $170

Which of the following is FALSE?A.In comparison to a typical commercial bank, an investment bank is likely to have a higher level of equity capital. B.Commercial banks and investment companies often invest in existing firms while venture capital firms often invest in new, young, and risky firms. C.The most common benchmark of relative size of a firm in the securities trading and underwriting industry is based on total equity. D.The largest source of funding for securities firms and investment banks as an industry is repurchase agreements. E.In a private offering, the investment banker acts as a private placement agent for a fee, placing securities with one or a few institutional investors such as life insurance companies.

An accurate statement about equity financing is that it Blank______.Multiple choice question.does not allow disposition of its assets on a pro rata basisrequires a form of collateraldoes not allow an investor share in the profits of the ventureprovides an investor some form of ownership position in the venture

Which of the following statements is FALSE?A) A bank's assets are its uses of funds.B) A bank issues liabilities to acquire funds.C) The bank's assets provide the bank with income.D) Bank capital is recorded as an asset on the bank balance sheet

Which of the following statements is FALSE?A.Franco Modigliani and Merton Miller argued that with perfect capital markets, the total value of a firm should not depend on its capital structure.B.It is inappropriate to discount the cash flows of levered equity at the same discount rate that we use for unlevered equity.C.Leverage decreases the risk of the equity of a firm.D.Because the cash flows of the debt and equity sum to the cash flows of the project, by the Law of One Price the combined values of debt and equity must be equal to the cash flows of the project.