Which of the Following Statements Is CORRECT

question 41

Multiple Choice

Which of the following statements is CORRECT?

• A) If General Electric were to issue new stock this year it would be considered a secondary market transaction since the company already
• Has stock outstanding.
• B) Capital market transactions only include preferred stock and common
• Stock transactions.
• C) The distinguishing feature between spot markets versus futures markets transactions is the maturity of the investments. That is, 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.
• D) Both Nasdaq "dealers" and NYSE "specialists" hold inventories of
• Stocks.
• E) An electronic communications network (ECN) is a physical location
• Exchange.

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Definitions:

Supply Curve

A graph showing the relationship between the price of a good and the amount of the good that suppliers are willing to sell at that price.

Market Demand

The total amount of a product or service that all consumers in a market are willing and able to purchase at various prices.

Equilibrium Price

This is the price at which the quantity of a good or service demanded by consumers equals the quantity supplied by producers, resulting in a state of market balance.

Quantity Discounts

Reductions in price offered by sellers to buyers who purchase large volumes or quantities of a product, incentivizing bulk purchasing.