Foundations Of Financial Management
17th Edition
ISBN: 9781260013917
Author: BLOCK, Stanley B., HIRT, Geoffrey A., Danielsen, Bartley R.
Publisher: Mcgraw-hill Education,
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Textbook Question
Chapter 1, Problem 11DQ
In terms of the life of the securities offered, what is the difference between money and capital markets? (LO1-5)
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1. What is the money market (include in your answer the characteristics of the money market and the types of securities that are traded in the money market)?
c). Explain the difference between money market and capital market and mention two (2) securities traded in each of these markets.
explain the statement"The money market is neccessary but not sufficinet for the liduiidity of securities on the stock market"
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Foundations Of Financial Management
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Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Similar questions
- Which of the following are money market instruments? Check all that apply. Common stocks Commercial paper Corporate bonds Treasury bills Preferred stocks A financial instrument whose value is derived from the value of an underlying asset is called a (Speculation, hedge, derivative)arrow_forwardWhich of the following is an example of a capital market instrument? Money market mutual funds. U.S. Treasury bills. Commercial paper. Banker’s acceptances. Preferred stock.arrow_forward3.Explain the difference between the following concepts in finance: a) Capital market & money market b)Debt finance& Equity finance c)Systematic risk & unsystematic risk d)Coupon rate of security and Its yield to maturityarrow_forward
- 1. What is interest rates? 2. How does it affect the stock market?arrow_forward(1) If derivatives can be so risky, why do so manybusinesses continue to use this market to managetheir finances? (2) Why do individual investorsparticipate in the stock and bond markets but not inthe money market?arrow_forwardwhy is money market necessary but not sufficient for the liquidity of securities on the stock marketarrow_forward
- How do money markets and capital markets differ? Identify the types of securities traded in money and capital markets.arrow_forwardWhat are Capital Markets, and how do bonds markets fit into the definition of Capital Markets?arrow_forwardExplain the statement “The money market is necessary but not sufficient for the liquidity of securities on the stock market”arrow_forward
- How do stocks and bonds differ in terms of the future payments that they are expected to make? Which type of investment (stocks or bonds) is considered to be more risky? Given what you know, which investment (stocks or bonds) do you think commonly goes by the nickname “fixed income”?arrow_forwardWhich of the following is not a Money Market Instruments? a. Corporate Bonds b. Bankers’ Acceptance c. Bills of Exchange d. Treasury Billsarrow_forwardWhich of the following can be categorized as Long term sources of finance ? i Equity Shares ii Trade Credit iii Debenture iv Money Market Instruments a. Both Money Market Instruments and Trade Credit b. Both Equity Shares and Debentures c. Only Equity Shares d. Only Money Market Instrumentsarrow_forward
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