Questions And Complete The Following Problems

935 Words Aug 23rd, 2014 4 Pages
Answer the following questions and complete the following problems, as applicable.
1. Classify the following transactions as taking place in the primary or secondary markets:
• IBM issues $200 million of new common stock.
Primary Market
• The New Company issues $50 million of common stock in an IPO.
Primary Market
• IBM sells $5 million of GM preferred stock from its marketable securities portfolio.
Secondary market
• The Magellan Fund buys $100 million of previously issued IBM bonds.
Secondary Market
• Prudential Insurance Co. sells $10 million of GM common stock.
Primary Market
2. Classify the following financial instruments as money market securities or capital market securities:
• Federal Funds money market securities
• Common Stock capital market securities
• Corporate Bonds capital market securities
• Mortgages capital market securities
• Negotiable Certificates of Deposit money market securities
• U.S. Treasury Bills money market securities
• U.S. Treasury Notes capital market securities
• U.S. Treasury Bonds capital market securities
• State and Government Bonds capital market securities
3. What are the different types of financial institutions? Include a description of the main services offered by each.

The seven types of financial institution are as follows;
A. Commercial Banks- depository whose major assets are loans and whose major liabilities are deposits, commercial banks covers a broader range, including consumer, commercial and real estate loans. Commercial…
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