Which of the following statements is CORRECT?
A) The New York Stock Exchange is an auction market with a physical location.
B) Capital market transactions involve only the purchase and sale of
Equity securities, i.e., common stocks.
C) If an investor sells shares of stock through a broker, then this
Would be a primary market transaction.
D) Consumer automobile loans are evidenced by legal documents called "promissory notes," and these individual notes are traded in the
Money market.
E) While the distinctions are blurring as investment banks are today buying commercial banks, and vice versa, investment banks generally specialize in lending money, whereas commercial banks generally help companies raise capital from other parties.

Question

Quizplus · Accepted Answer

The New York Stock Exchange is an example of an auction market with a physical location, where buyers and sellers come together to trade securities. Other examples of auction markets include the London Stock Exchange and the Chicago Board of Trade.

(Note: B is incorrect because capital market transactions can also involve debt securities such as bonds, and not just equity securities. C is incorrect because selling shares through a broker is a secondary market transaction, not a primary market transaction. D is incorrect because consumer automobile loans are not traded in the money market, which deals with short-term debt securities. E is incorrect because investment banks generally help companies raise capital through underwriting securities, rather than lending money.)

Which of the Following Statements Is CORRECT