All of the Following Are Secondary Market Transactions EXCEPT

question 94

Multiple Choice

All of the following are secondary market transactions EXCEPT:

• A)GE sells $30 million of new preferred stock.
• B)Microsoft sells $2 million of IBM preferred stock out of its marketable securities portfolio.
• C)the Magellan Fund buys $100 million of Apple previously issued bonds.
• D)Allstate Insurance Co. sells $5 million in IBM bonds.

---

Definitions:

Deflation

Deflation is a decrease in the general price level of goods and services, often associated with an increase in the purchasing power of money.

Nominal Interest Rate

The proportionate growth in the amount of money that borrowers need to repay to lenders, excluding adjustments for inflation.

Nominal Interest Rates

The interest rate prior to inflation adjustment, denoting the nominal value of interest payments.

Real Interest Rates

The interest rates adjusted for inflation, more accurately reflecting the true cost of borrowing.