Active Secondary Markets Do NOT

question 77

Multiple Choice

Active secondary markets do NOT:

• A)provide investors with liquidity
• B)raise funds for the issuers of securities
• C)perform price discovery
• D)perform maturity transformation
• E)assist the operation of primary markets.

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Definitions:

Barriers to Entry

Economic, procedural, or regulatory obstacles that prevent new competitors from easily entering an industry or area of business.

Breaking Even

The point at which total costs and total revenue are equal, resulting in no net loss or gain for a business.

Monopolistic Competitor

A firm in a market structure where many companies sell products that are similar but not identical, allowing for some control over prices.

Monopolistic Competitors

Companies in a market where many sellers offer products that are similar but not identical, giving each some degree of market power.