Chapter 2

A.) All past

In weak-form efficient markets, ________________ information is already incorporated in the price of the stock, so investors cannot profit if they make decisions based on that type of information. A.) All past B.) All publicly available C.) All available D.) All future E.) All privately available

E.) Short-term debt securities such as Treasury bills and commercial paper.

Money markets are markets for A.) Consumer automobile loans. B.) Foreign currencies. C.) Common stocks. D.) Long-term bonds. E.) Short-term debt securities such as Treasury bills and commercial paper.

E.) one shareholder sells securities to another shareholder.

The secondary market is the market in which: A.) the sale proceeds of a trade flow to the issuer of the security. B.) publicly held firms issue new shares of stock. C.) only bonds or other debt securities are sold. D.) trades occur on exchanges other than the New York Stock Exchange. E.) one shareholder sells securities to another shareholder.

C.) IBM issues 2,000,000 shares of new stock and sells them to the public through an investment banker.

Which of the following is a primary market transaction? A.) IBM sells 2,000,000 shares of treasury stock to its employees when they exercise options that were granted in prior years. B.) You sell 200 shares of IBM stock on the NYSE through your broker. C.) IBM issues 2,000,000 shares of new stock and sells them to the public through an investment banker. D.) You buy 200 shares of IBM stock from your brother. The trade is not made through a broker--you just give him cash and he gives you the stock. E.) One financial institution buys 200,000 shares of IBM stock from another institution. An investment banker arranges the transaction.

A.) Both Nasdaq dealers and "specialists" on the NYSE hold inventories of stocks

Which of the following statements is CORRECT? A.) Both Nasdaq dealers and "specialists" on the NYSE hold inventories of stocks. B.) If General Electric were to issue new stock this year, this would be considered a secondary market transaction since the company already has stock outstanding. C.) Capital market transactions involve only preferred stock or common stock. D.) Spot market transactions involve securities that have maturities of less than one year whereas futures markets transactions involve securities with maturities greater than one year. E.) Money market transactions do not involve securities denominated in currencies other than the U.S. dollar.

C.) A secondary market transaction.

You recently sold 200 shares of Disney stock, and the transfer was made through a broker. This is an example of: A.) An exchange market transaction. B.) A futures market transaction. C.) A secondary market transaction. D.) A primary market transaction. E.) A money market transaction.