Financial Markets & Institutions

Individuals, corporations, and governments can be either savings deficit units or savings surplus units.

• TRUE

• FALSE

A corporation needing funds sells securities to investors in the secondary market.

• TRUE

• FALSE

Venture capitalists typically provide funds to high-risk startup companies but take no active role in their management.

• TRUE

• FALSE

Seasoned equity offerings occur in the secondary market.

• TRUE

• FALSE

Each purchase occurring in the secondary markets increases the total stock of financial assets that exist in the economy.

• TRUE

• FALSE

The difference between the price the corporation gets and the public offering price is called the broker-dealer spread.

• TRUE

• FALSE

Transactions in common stock occur in the money market, due to the large amount of money involved in such transactions.

• TRUE

• FALSE

In a private placement, the securities are offered and sold to a limited number of investors.

• TRUE

• FALSE

For a firm to have its securities listed on an exchange, it must meet certain requirements. These usually include measures of profitability, size, market value, and public ownership.

• TRUE

• FALSE