Questions from Financial Markets

Q: Why do firms engage in IPOs? What is the amount of

Why do firms engage in IPOs? What is the amount of fees that the lead underwriter and its syndicate charge a firm that is going public? Why are there many IPOs in some periods and few IPOs in other pe...

Q: Explain the difference between obtaining funds from a venture capital firm and

Explain the difference between obtaining funds from a venture capital firm and engaging in an IPO. Explain how the IPO may serve as a means by which the venture capital firm can cash out.

Q: Many financial institutions borrow heavily in the money markets using mortgages and

Many financial institutions borrow heavily in the money markets using mortgages and mortgage-backed securities as collateral. Write a short essay about the lessons of the credit crisis to the deficit...

Q: During the credit crisis, U.S. interest rates were

During the credit crisis, U.S. interest rates were extremely low, which enabled businesses to borrow at a low cost. Holding other factors constant, this should have resulted in a higher number of feas...

Q: Explain the use of a prospectus developed before an IPO. Why

Explain the use of a prospectus developed before an IPO. Why does a firm do a road show before its IPO? What factors influence the offer price of stock at the time of the IPO?

Q: Describe a lockup provision and explain why it is required by the

Describe a lockup provision and explain why it is required by the lead underwriter.

Q: What does it mean to “flip” shares? Why would

What does it mean to “flip” shares? Why would investors want to flip shares?

Q: Explain the use of the price-earnings (PE) ratio

Explain the use of the price-earnings (PE) ratio for valuing a stock. Why might investors derive different valuations for a stock when using the price-earnings method? Why might investors derive an in...

Q: Identify the factors that affect a stock portfolio’s volatility and explain their

Identify the factors that affect a stock portfolio’s volatility and explain their effects.

Q: Explain how to estimate the beta of a stock. Explain why

Explain how to estimate the beta of a stock. Explain why beta serves as a measure of the stock’s risk.