ECONOMICS
FINANCIAL MARKETS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Common stock of a large firm
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Bonds of a major, multinational corporation
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Bank loans made to smaller firms
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Debt issued by the U.S. Treasury
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Detailed explanation-1: -The instruments traded in a secondary market consist of fixed income instruments, variable income instruments, and hybrid instruments. Fixed income instruments are primarily debt instruments ensuring a regular form of payment such as interests, and the principal is repaid on maturity.
Detailed explanation-2: -The secondary market, also called the aftermarket and follow on public offering, is the financial market in which previously issued financial instruments such as stock, bonds, options, and futures are bought and sold.
Detailed explanation-3: -In the context of debt securities and other financial instruments, the market where investors buy previously issued securities from other investors as opposed to the primary market, where investors buy new securities directly from the issuer or an intermediary.
Detailed explanation-4: -The correct answer is B. Ford Motor sells a new common stock issue to raise funds through a public offering. The primary and secondary markets are the main market categories in the financial markets.