The Trading of Previously Issued Securities from One Investor to Another

question 154

Multiple Choice

The trading of previously issued securities from one investor to another takes place in the

• A) primary market.
• B) secondary market.
• C) initial offerings market.
• D) corporate trading market.

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Definitions:

Time Deposits

A financial product provided by banks that offers a higher interest rate in exchange for keeping a specified amount of money untouched for a predetermined period.

Reserve Requirement

The minimum percentage of customer deposits and notes that a bank must hold as reserves rather than lending out, as mandated by the central bank.

Demand Deposits

Bank accounts from which deposited funds can be withdrawn at any time without any notice to the institution, typically through writing checks.

Excess Reserves

The reserves held by banks in excess of what is required by regulations, which can be loaned out to generate additional income.