Question Status: New Guidelines: Analytic skills 14) The ________ market is where securities are initially issued and the ________ market is where pre-owned securities (not new issues) are traded. A) primary; secondary B) money; capital C) secondary; primary D) primary; money Answer: A Topic: Financial Markets Question Status: New 2.3 Describe the differences between the capital markets and the money markets. 1) The Over-the-Counter (OTC) exchange is not an organization but an intangible market for trading securities which are not listed by the organized exchanges. Answer: TRUE Topic: Financial Markets Question Status: Revised 2) Unlike the organized exchanges, the OTC makes a market in both outstanding securities and new public issues, making it both a secondary and a primary market. Answer: TRUE Financial Markets Question Status: Revised 3) In the OTC market, the ask price is the highest price offered by a dealer to purchase a given security. Answer: FALSE Topic: Financial Markets Question Status: Revised 4) In the OTC market, the prices at which securities are traded result from both competitive bids and negotiation. Answer: TRUE Financial Markets Question Status: Revised 5) Capital markets are for investors who want a safe temporary place to deposit funds where they can earn interest and for borrowers who have a short term need for funds. Answer: FALSE Topic: Financial Markets Question Status: New 6) Money markets are markets for long term funds such as bonds and equity. Answer:
Question Status: New Guidelines: Analytic skills 14) The ________ market is where securities are initially issued and the ________ market is where pre-owned securities (not new issues) are traded. A) primary; secondary B) money; capital C) secondary; primary D) primary; money Answer: A Topic: Financial Markets Question Status: New 2.3 Describe the differences between the capital markets and the money markets. 1) The Over-the-Counter (OTC) exchange is not an organization but an intangible market for trading securities which are not listed by the organized exchanges. Answer: TRUE Topic: Financial Markets Question Status: Revised 2) Unlike the organized exchanges, the OTC makes a market in both outstanding securities and new public issues, making it both a secondary and a primary market. Answer: TRUE Financial Markets Question Status: Revised 3) In the OTC market, the ask price is the highest price offered by a dealer to purchase a given security. Answer: FALSE Topic: Financial Markets Question Status: Revised 4) In the OTC market, the prices at which securities are traded result from both competitive bids and negotiation. Answer: TRUE Financial Markets Question Status: Revised 5) Capital markets are for investors who want a safe temporary place to deposit funds where they can earn interest and for borrowers who have a short term need for funds. Answer: FALSE Topic: Financial Markets Question Status: New 6) Money markets are markets for long term funds such as bonds and equity. Answer:
Test-Bank-for-Principles-of-Managerial-Finance-13E-13th-Edition.docx