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Fundamentals of Financial Manageme...

15th Edition
Eugene F. Brigham + 1 other
ISBN: 9781337395250

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BuyFindarrow_forward

Fundamentals of Financial Manageme...

15th Edition
Eugene F. Brigham + 1 other
ISBN: 9781337395250
Textbook Problem

Indicate whether the following instruments are examples of money market or capital market securities.

  1. a. U.S. Treasury bills
  2. b. Long-term corporate bonds
  3. c. Common stocks
  4. d. Preferred stocks
  5. e. Dealer commercial paper

a.

Summary Introduction

To identify: Whether the given instruments are the money market securities or capital market securities.

Introduction:

Money Market: A market where the companies issue the highly liquid or short-term securities is known as money market.

Capital Market: A market where the companies are registered and issue the long-term debt and equity securities to the public. Primary market and secondary market are the type of capital market. Capital market mainly raises the long-term finances.

Explanation
  • Money market securities are short-term investment securities.
  • U.S. Treasury bills are the short-term secur...

b.

Summary Introduction

To identify: Whether the given instruments are the money market securities or capital market securities.

Introduction:

Money Market: A market where the companies issue the highly liquid or short-term securities is known as money market.

Capital Market: A market where the companies are registered and issue the long-term debt and equity securities to the public. Primary market and secondary market are the type of capital market. Capital market mainly raises the long-term finances.

c.

Summary Introduction

To identify: Whether the given instruments are the money market securities or capital market securities.

Introduction:

Money Market: A market where the companies issue the highly liquid or short-term securities is known as money market.

Capital Market: A market where the companies are registered and issue the long-term debt and equity securities to the public. Primary market and secondary market are the type of capital market. Capital market mainly raises the long-term finances.

d.

Summary Introduction

To identify: Whether the given instruments are the money market securities or capital market securities.

Introduction:

Money Market: A market where the companies issue the highly liquid or short-term securities is known as money market.

Capital Market: A market where the companies are registered and issue the long-term debt and equity securities to the public. Primary market and secondary market are the type of capital market. Capital market mainly raises the long-term finances.

e.

Summary Introduction

To identify: Whether the given instruments are the money market securities or capital market securities.

Introduction:

Money Market: A market where the companies issue the highly liquid or short-term securities is known as money market.

Capital Market: A market where the companies are registered and issue the long-term debt and equity securities to the public. Primary market and secondary market are the type of capital market. Capital market mainly raises the long-term finances.

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