Which of the Following Statements Is CORRECT

question 2

Multiple Choice

Which of the following statements is CORRECT?

• A) If Disney issues additional shares of common stock through an investment banker, this would be a secondary market transaction.
• B) If you purchased 100 shares of Disney stock from your brother-in- law, this would be an example of a primary market transaction.
• C) The IPO market is a subset of the secondary market.
• D) Only institutions, and not individuals, can participate in derivatives market transactions.
• E) As they are generally defined, money market transactions involve debt securities with maturities of less than one year.

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Definitions:

Insurance

A financial product that provides protection against potential future losses or damages in exchange for a premium.

Oral Contract

A verbal agreement between parties that is legally binding.

Statute of Frauds

A rule in law that mandates specific contract types must be written and signed to be legally binding.

Statute of Frauds

A legal principle that requires certain types of contracts to be in writing and signed by the party to be charged, to be enforceable.