金融市场与金融机构基础 Fabozzi Chapter14.docVIP

Foundations of Financial Markets and Institutions, 4e (Fabozzi/Modigliani/Jones) Chapter 14 Secondary Markets Multiple Choice Questions 1 Function of Secondary Markets 1) The key distinction between a primary market and a secondary market is that, in the secondary market, ________. A) funds flow from the seller of the asset to the buyer. B) the issuer of the asset receives funds from the buyer. C) funds flow from the buyer of the asset to the seller. D) the existing issue changes hands in the primary market. Answer: C Comment: The key distinction between a primary market and a secondary market is that, in the secondary market, the issuer of the asset does not receive funds from the buyer. Rather, the existing issue changes hands in the secondary market, and funds flow from the buyer of the asset to the seller. Diff: 2 Topic: 14.1 Function of Secondary Markets Objective: 14.1 the definition of a secondary market 2) Without a secondary market, issuers would be unable to ________, or they would have to pay a higher rate of return, as investors would ________ in compensation for expected illiquidity in the securities. A) sell new securities; increase the discount rate B) sell new securities; decrease the discount rate C) buy new securities; decrease the price D) sell new securities; increase the price Answer: A Diff: 2 Topic: 14.1 Function of Secondary Markets Objective: 14.12 the implications of pricing efficiency for market participants 3) Investors in financial assets receive ________. A) illiquidity for their assets. B) information about the assets fair or consensus values. C) increased the costs of searching for likely buyers and sellers of assets. D) the disadvantage of higher transaction costs. Answer: B Comment: Investors in financial assets receive several benefits from a secondary market. Such a market obviously offers them liquidity for their assets as well as information about the assets’ fair or consensus values. Furthermore, secondary markets