Which of the Following Statements About Financial Markets and Securities

question 18

Multiple Choice

Which of the following statements about financial markets and securities is TRUE?

• A)Many common stocks are traded over-the-counter,although the largest corporations usually have their shares traded at organized stock exchanges such as the New York Stock Exchange.
• B)As a corporation gets a share of the broker's commission,a corporation acquires new funds whenever its securities are sold.
• C)Capital market securities are usually more widely traded than shorter-term securities and so tend to be more liquid.
• D)Prices of capital market securities are usually more stable than prices of money market securities,and so are often used to hold temporary surplus funds of corporations.

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Definitions:

Transaction Exposure

The risk of adverse changes in exchange rates affecting the value of a company's transactions in foreign currencies.

Financial Risk

Refers to the possibility of losing money on an investment or business venture.

Home Currency

Home currency refers to the currency of the country in which an individual or entity primarily operates or resides.