Understanding Financial Markets and Money Markets

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Questions and Answers

What type of market transaction is it when San Miguel Corporation sells a new stock for the first time to the public?

  • Quaternary market transaction
  • Secondary market transaction
  • Primary market transaction (correct)
  • Tertiary market transaction

Who assists the issuer of a new security in setting the offering price and marketing the securities to the public?

  • Underwriter (correct)
  • Portfolio manager
  • Financial analyst
  • Stockbroker

In which market can investors buy and sell securities after they have been issued in the primary market?

  • Secondary market (correct)
  • Quaternary market
  • Primary market
  • Tertiary market

What is the purpose of a secondary market transaction in buying shares of a company like San Miguel Corporation?

<p>To buy shares from existing shareholders (C)</p> Signup and view all the answers

Which type of market gives a continuous reflection of the value of securities according to the best available information?

<p>Secondary market (B)</p> Signup and view all the answers

Where can secondary market transactions take place, besides the stock exchange?

<p>Over-the-counter (OTC) market (B)</p> Signup and view all the answers

What is the key difference between the money market and the capital market?

<p>Money market deals with short-term funds, while capital market deals with long-term funds. (B)</p> Signup and view all the answers

In which market are long-term debt securities such as bonds traded?

<p>Capital market (A)</p> Signup and view all the answers

Where are new shares issued and sold to the investing public for the first time?

<p>Primary market (D)</p> Signup and view all the answers

What type of securities are typically traded in the stock market?

<p>Equity securities or stocks (A)</p> Signup and view all the answers

Where does an investor buy and sell stocks, according to the text?

<p>Secondary market (D)</p> Signup and view all the answers

What is the primary function of the money market as described in the text?

<p>Buying and selling short-term debt securities (D)</p> Signup and view all the answers

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