Series 79 Exam Study Guide Questions with Correct
Answers
Financial markets Correct Answer-Overarching term that describes the
coming together of buyers and sellers to trade assets such as equities,
debt, currencies, and derivatives.
They facilitate:
1) the raising of capital
2) the transfer of risk
3) international trade
Capital markets Correct Answer-Type of financial market that offers
companies and governments the opportunity to raise long-term (period >
1 year) funds, by matching those that want capital with those that have it
Consists of:
1) stock markets
2) bond markets
Stock markets Correct Answer-A capital market that provides equity
financing through the issuance of shares of common stock and their
subsequent trading
, Bond markets Correct Answer-A capital market that provides debt
financing through the issuance of corporate, municipal, or government
bonds and their subsequent trading
Primary market Correct Answer-Markets on which new stock or bond
issues are sold.
Ex. initial public offering (IPO) by a private company and additional
issues (i.e. follow-on offerings) in which an existing public company
sells new shares into the market
Secondary market Correct Answer-Market on which existing securities
are bought and sold directly among investors and traders (can take place
on the securities exchange or over-the-counter)
Trading in US government/municipal bonds and corporate bonds is
usually OTC
Underwriting Correct Answer-The process by which investment bankers
raise investment capital from investors on behalf of corporations and
governments that are issuing either equity or debt securities
Commodity markets Correct Answer-Market in which raw materials and
agricultural products (food, metals, electricity) are exchanged.
Goods are bought/sold in standardized contracts which can include spot
prices, forwards, futures, and options in futures
Answers
Financial markets Correct Answer-Overarching term that describes the
coming together of buyers and sellers to trade assets such as equities,
debt, currencies, and derivatives.
They facilitate:
1) the raising of capital
2) the transfer of risk
3) international trade
Capital markets Correct Answer-Type of financial market that offers
companies and governments the opportunity to raise long-term (period >
1 year) funds, by matching those that want capital with those that have it
Consists of:
1) stock markets
2) bond markets
Stock markets Correct Answer-A capital market that provides equity
financing through the issuance of shares of common stock and their
subsequent trading
, Bond markets Correct Answer-A capital market that provides debt
financing through the issuance of corporate, municipal, or government
bonds and their subsequent trading
Primary market Correct Answer-Markets on which new stock or bond
issues are sold.
Ex. initial public offering (IPO) by a private company and additional
issues (i.e. follow-on offerings) in which an existing public company
sells new shares into the market
Secondary market Correct Answer-Market on which existing securities
are bought and sold directly among investors and traders (can take place
on the securities exchange or over-the-counter)
Trading in US government/municipal bonds and corporate bonds is
usually OTC
Underwriting Correct Answer-The process by which investment bankers
raise investment capital from investors on behalf of corporations and
governments that are issuing either equity or debt securities
Commodity markets Correct Answer-Market in which raw materials and
agricultural products (food, metals, electricity) are exchanged.
Goods are bought/sold in standardized contracts which can include spot
prices, forwards, futures, and options in futures
