financial markets and institutions 6th edition ant
6th edition anthony saunders
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Solution Manual for Financial Markets And Institutions 8th Edition by Saunders all chapters 1 to 25 ISBN; 9781265561437
Financial Markets And Institutions 8th Edition By Anthony Saunders
Financial Markets And Institutions 8th Edition By Anthony Saunders
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Created By: Test Bank
Test Bank for Financial Markets and Institutions
6th Edition Anthony Saunders, All chapters
Complete Guide A+ 2024
Chapter 01 Introduction Answer Key
True / False Questions
1. Primary markets are markets where users of funds raise cash by selling securities to
funds’ suppliers.
TRUE
2. Secondary markets are markets used by corporations to raise cash by issuing securities
for a short time period.
FALSE
3. In a private placement, the issuer typically sells the entire issue to one, or only a few,
institutional buyers.
TRUE
4. The NYSE is an example of a secondary market.
TRUE
5. Privately placed securities are usually sold to one or more investment bankers and then
resold to the general public.
FALSE
6. Money markets are the markets for securities with an original maturity of 1 year or less.
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TRUE
7. Financial intermediaries such as banks typically have assets that are riskier than their
liabilities.
TRUE
8. There are three types of major financial markets today: primary, secondary, and
derivatives markets. The NYSE and NASDAQ are both examples of derivatives markets.
FALSE
Multiple Choice Questions
9. What factors are encouraging financial institutions to offer overlapping financial services
such as banking, investment banking, brokerage, etc.?
I. Regulatory changes allowing institutions to offer more services
II. Technological improvements reducing the cost of providing financial services
III. Increasing competition from full service global financial institutions
IV. Reduction in the need to manage risk at financial institutions
A. I only
B. II and III only
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C. I, II, and III only
D. I, II, and IV only
E. I, II, III, and IV Figure 1-1
IBM creates and sells additional stock to the investment banker, Morgan Stanley. Morgan
Stanley then resells the issue to the U.S. public.
10. This transaction is an example of a(n)
A. primary market transaction
B. asset transformation by Morgan Stanley
C. money market transaction
D. foreign exchange transaction
E. forward transaction
11. Morgan Stanley is acting as a(n) A.asset transformer
B. asset broker
C. government regulator
D. foreign service representative
12. A corporation seeking to sell new equity securities to the public for the first time in order
to raise cash for capital investment would most likely A.conduct an IPO with the assistance of an
investment banker
B. engage in a secondary market sale of equity
C. conduct a private placement to a large number of potential buyers
D. place an ad in the Wall Street Journal soliciting retail suppliers of funds
E. none of the above
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13. The largest capital market security outstanding in 2010 measured by market value was
A. securitized mortgages
B. corporate bonds
C. municipal bonds
D. Treasury bonds
E. corporate stocks
14. The diagram below is a diagram of the A.secondary markets
B. primary markets
C. money markets
D. derivatives markets
E. commodities markets
15. and allow a financial intermediary to offer safe, liquid liabilities such as
deposits while investing the depositors’ money in riskier, illiquid assets.
A.Diversification; high equity returns
B. Price risk; collateral
C. Free riders; regulations
D. Monitoring; diversification
E. Primary markets; foreign exchange markets
16. Depository institutions include: A.banks
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