Which of the following statements is CORRECT?
A) The most important difference between spot markets versus futures markets is the maturity of the instruments that are traded.Spot market transactions involve securities that have maturities of less than one year whereas futures markets transactions involve securities with maturities greater than one year.
B) Capital market transactions involve only preferred stock or common stock.
C) If General Electric were to issue new stock this year,this would be considered a secondary market transaction since the company already has stock outstanding.
D) Both NASDAQ dealers and "specialists" on the NYSE hold inventories of stocks.
E) Money market transactions do not involve securities denominated in currencies other than the U.S.dollar.

Question

Quizplus · Accepted Answer

Both NASDAQ dealers and "specialists" on the NYSE hold inventories of stocks. A is incorrect as the difference between spot and futures markets is not the maturity of the instruments, but rather the timing of the trade settlement. B is incorrect as capital market transactions can involve other securities such as bonds. C is incorrect as issuing new stock is considered a primary market transaction, while a secondary market transaction involves trading existing securities on the exchange. E is incorrect as money market transactions can involve securities denominated in currencies other than the U.S. dollar.

Which of the Following Statements Is CORRECT