​Which of the Following Statements Is CORRECT

question 27

Multiple Choice

​Which of the following statements is CORRECT?

• A) ​If you purchase 100 shares of Disney stock from your brother-in-law,this is an example of a primary market transaction.
• B) ​If Disney issues additional shares of common stock through an investment banker,this would be a secondary market transaction.
• C) ​The NYSE is an example of an over-the-counter market.
• D) ​Only institutions,and not individuals,can engage in derivative 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:

Profit-maximizing Rule

The principle that firms maximize their profits by producing at a level where marginal costs equal marginal revenues.

Marginal Revenue

The increased earnings a business obtains from the sale of one extra item or service.

Marginal Cost

The increase in total cost that arises from producing one additional unit of a product.

Output

The quantity of goods or services produced in a given time period by a firm, industry, or country.