Which of the following statements is CORRECT?
A) While the distinctions are becoming blurred,investment banks generally specialize in lending money,whereas commercial banks generally help companies raise capital from other parties.
B) The NYSE operates as an auction market,whereas NASDAQ is an example of a dealer market.
C) Money market mutual funds usually invest their money in a well-diversified portfolio of liquid common stocks.
D) Money markets are markets for long-term debt and common stocks.
E) A liquid security is a security whose value is derived from the price of some other "underlying" asset.

Question

Quizplus · Accepted Answer

The NYSE is an example of an auction market, where buyers and sellers meet in one central location to agree on a price. In contrast, NASDAQ is an example of a dealer market, where buyers and sellers are connected through a network of dealers who match buyers with sellers. The other statements are incorrect. Investment banks generally help companies raise capital from other parties, such as by underwriting securities offerings. Commercial banks specialize in lending money. Money market mutual funds typically invest in short-term debt securities. Money markets are markets for short-term debt securities. A liquid security is a security that can be easily bought or sold without affecting the security's price.

Which of the Following Statements Is CORRECT