Answered: It is said that open market…

It is said that open market transactions involve the sale or purchase of securities by the BSP to withdraw or inject liquidity into the system. What is Securities?

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter7: Losses—deductions And Limitations

Section: Chapter Questions

Problem 15DQ

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Concept explainers

Flow of Funds

The flow of funds is the financial accounts of the nation, which monitor and control the cash flow among various sectors or industries, or markets. Central banks use these flow of funds statements to acquire macroeconomic data, to publish cash inflow and cash outflow statements of the nation. This flow of funds system is utilized to identify economic activity and changes in the economy. It is used by Federal Reserve to determine the Gross Domestic Product (GDP) of the nation and to implement monetary policy and fiscal policies.

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Securities exchanges create efficient markets that do all of the following EXCEPT control the supply and demand for securities through price. allocate funds to the most productive uses. allow the price to be determined by supply and demand of securities. ensure a market in which the price reflects the true value of the security.
Which of the following is NOT a purpose of valuing financial securities? a. Valuation is used to provide sensible financial decisions.b. Valuation is used to get the intrinsic value of a financial security.c. Valuation is helpful for investors in order to determine whether to buy or sell their securitiesd. Valuation is used to predict the exact prices of financial securities.
What is the primary motivation of investors in performing security analysis? A-identify the best times to buy and sell securities B-Contribute to the efficiency of securities markets C-Identify securities whose insrinsic values are at or near their market values D-Identify mispriced stocks
The process of fixing the price of securities in the financial market is based on which of the following: a. Price is fixed by the seller of the Financial Instrument b. Price is fixed by the issuer of the Instruments c. Government fixes the price d. Demand and supply of the market helps to fix the pric
The process of fixing the price of securities in the financial market is based on which of the following: a. Demand and supply of the market helps to fix the price b. Government fixes the price c. Price is fixed by the seller of the Financial Instrument d. Price is fixed by the issuer of the Instruments
Fees paid to investment bankers and lawyers for issuing securities are called Component costs Issuance costs Security costs Licensing costs
What is the definition of hedging securities? Explain.
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Methods/instruments that banks use to hedge the risks pertaining trading securities
Discuss the similarities and differences between a bond repurchase agreement anda sale and buyback transaction. How do repos done by securities dealers differ from those done by central banks?
Secondary Market can be best described in which of the following statement? a. It is a market for an unlisted company to raise equity capital. b. It is a market where securities are issued through private placement. c. It is a market in which short-term money market instruments such as Treasury bills are traded. d. It is a market in which preowned securities are traded.