Which of the Following Statements Is True About Secondary Markets

question 21

Multiple Choice

Which of the following statements is true about secondary markets?

• A) In secondary markets, outstanding shares of stock are bought and sold among investors.
• B) Most secondary market transactions directly affect the capital of the firm that issues the securities.
• C) An active secondary market causes firms to sell their new debt or equity issues at a higher transaction cost of funds.
• D) All of the above statements are true.

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Definitions:

Given Industry

A specific sector of the economy, often defined by the type of activity it engages in.

Seniority Systems

Policies within organizations that determine the hierarchy, privileges, and benefits based on the length of service of employees.

Arbitrary Management

A style of management based on random decisions or personal whim, rather than any systematic planning or reasoning.

Whatever Means

"Whatever means" refers to the use of any available methods or strategies to achieve a specific goal, often without specifying the nature of the methods.