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Unformatted text preview: 19 Student: _______________________________________________________________________________________ True False True False True False True False True False True False True False True False True False True False True False True False True False True False True False True False True False True False 1. Securities markets represent the financial marketplaces for stocks and bonds. 2. Securities markets provide private investors a place to buy and sell stocks, bonds, and mutual funds. 3. An initial public offering (IPO) represents the first time a corporation's stock is offered and sold to persons outside of the company. 4. The proceeds from a secondary market sale of securities go to the corporation whose security is being traded. 5. In a secondary market sale of stock, the proceeds go to the investor selling the stock, not to the corporation. 6. Corporations sell a new issuance of securities in the Primary Market. 7. The primary market allows an investor to purchase financial securities from other investors. 8. The secondary market is where investors (both individuals and companies) go to find someone who is interested in selling their investments to them. 9. When given a choice, businesses prefer to obtain long-term financing through retained earnings or by borrowing from a lending institution such as a bank. 10. Issuing stock is considered equity financing. 11. Issuing bonds is considered debt financing. 12. It is easier for a small business to raise funds through a stock issuance than for a large, well-known company. 13. Before issuing stock or bonds, corporations must meet the disclosure requirements of the Federal Trade Commission (FTC). 14. An investment banking firm assists corporations in selling the new security issue. 15. When investment bankers underwrite an issue, they buy at a discounted price, the entire stock issue of a firm and then sell the stock, at full price, to private investors. 16. Only government employees represent institutional investors. 17. Examples of institutional investors are pension funds, mutual funds, and insurance companies. 18. Securities markets help companies raise long-term debt and equity financing. 19. The New York Stock Exchange will underwrite new issues of stocks or bonds. True False True False True False True False True False True False True False True False True False True False True False True False True False True False True False True False True False 20. Many observers suggest that the stock market is dominated by the buying and selling activities of institutional investors. 21. Investment bankers assist in the issuing and selling of new securities. 22. Institutional investors include insurance companies, individual investors, and mutual funds....
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This note was uploaded on 10/17/2011 for the course BUS BUS300 taught by Professor Na during the Spring '11 term at American River.

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