Question # 2: Which of the following statements is CORRECT?a.If Apple issues additional shares of common stock through an investment banker, this would be a secondary market transaction.b.If you purchased 100 shares of Apple stock from your sister-in-law, this would be an example of a primary market transaction.c.The IPO market is an example of a primary market.d.Question # 3: Which of the following statements is CORRECT?a.Capital market instruments include both long-term debt and common stocks.b.An example of a primary market transaction would be your uncle transferring 100 shares of Wal-Mart stock to you as a birthday gift.c.The NYSE does not exist as a physical location; rather, it represents a loose collection of dealers who trade stocks electronically.d.If your uncle in New York sold 100 shares of Microsoft through his broker to an investor in Los Angeles, this would be a primary market transaction.e.While the two frequently perform similar functions, investment banks generally specialize in lending money, whereas commercial banks generally help companies raise large blocks of capital from investors.

Question no.2 In the above question the correct statement would be C. IPO is an example of primary…

Answered: Question # 2: Which of the…

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter15: Distributions To Shareholders: Dividends And Repurchases

Section: Chapter Questions

Problem 5Q: Indicate whether the following statements are true or false. If the statement is false, explain why....

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Question # 2:

Which of the following statements is CORRECT?

If Apple issues additional shares of common stock through an investment banker, this would be a secondary market transaction.

If you purchased 100 shares of Apple stock from your sister-in-law, this would be an example of a primary market transaction.

The IPO market is an example of a primary market.

Question # 3:

Which of the following statements is CORRECT?

a.	Capital market instruments include both long-term debt and common stocks.
b.	An example of a primary market transaction would be your uncle transferring 100 shares of Wal-Mart stock to you as a birthday gift.
c.	The NYSE does not exist as a physical location; rather, it represents a loose collection of dealers who trade stocks electronically.
d.	If your uncle in New York sold 100 shares of Microsoft through his broker to an investor in Los Angeles, this would be a primary market transaction.
e.	While the two frequently perform similar functions, investment banks generally specialize in lending money, whereas commercial banks generally help companies raise large blocks of capital from investors.

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