71. What is the key difference between equity and debt securities?
a. Equity securities represent ownership in a company, while debt securities represent a loan to a company.
b. Equity securities pay fixed interest to investors, while debt securities offer potential capital gains.
c. Equity securities have a fixed maturity date, while debt securities have an indefinite term.
d. Equity securities have a higher risk of default compared to debt securities.
72. Which of the following is an example of a secondary market transaction?
a. Buying shares of a company in an initial public offering (IPO)
b. Purchasing government bonds directly from the Treasury
c. Trading stocks on a stock exchange
d. Participating in a private placement of corporate bonds
73. What is the role of a clearinghouse in securities trading?
a. Setting the rules and regulations for stock exchanges
b. Facilitating the settlement and clearing of trades
c. Underwriting new security issuances
d. Providing liquidity to the market
74. Which of the following is NOT a characteristic of debt markets?
a. Fixed income payments
b. Potential capital appreciation
c. Fixed maturity dates
d. Credit risk
75. What is the purpose of a bond’s coupon rate?
a. To determine the face value of the bond
b. To calculate the total return on investment
c. To establish the credit rating of the bond
d. To determine the interest payments to bondholders
