Financial6Markets6&6Institutions65t h Edition6Test6Bank
Chapter6016Introduction6Answer6Ke y True6/6False6Questions 1 .6 Primary6markets6are6markets6where6users6of6funds6raise6cash6by6s elling securities6to6funds’6suppliers. TRUE 2 .6 Secondary6markets6are6markets6used6by6corporations6to6raise6cash6by6is suing securities6for6a6short6time6perio d. FALSE 3 a6few,6institutional6buyers. .6 In6a6private6placement,6the6issuer6typically6sells6the6entire6issue6to6one,6 or6only TRUE 4 .6 The6NYSE6is6an6example6of6a6secondary6mar ket. TRUE 5 .6 Privately6placed6securities6are6usually6sold6to6one6or6more6investment6ba nkers and6then6resold6to6the6general6publi c. FALSE 6 year6or6less. .6 Money6markets6are6the6markets6for6securities6with6an6original6maturity 6of61 TRUE 7 than6their6liabilities. .6 Financial6intermediaries6such6as6banks6typically6have6assets6that6are6ri skier TRUE 8 .6 There6are6three6types6of6major6financial6markets6today:6primary,6secon dary, and6derivatives6markets.6The6NYSE6and6NASDAQ6are6both6example s6of derivatives6markets. FALSE Multiple6Choice6Questions 9 .6 What6factors6are6encouraging6financial6institutions6to6offer6overlappi ng financial6services6such6as6banking,6investment6banking,6brokerage,6et c.? I.6Regulatory6changes6allowing6institutions6to6offer6more6services II.6Technological6improvements6reducing6the6cost6of6providing6financ ial services III.6Increasing6competition6from6full6service6global6financial6instituti ons IV.6Reduction6in6the6need6to6manage6risk6at6financial6institu
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