The secondary market is the market in which: Select one: a. The sale proceeds of a trade flow to the issuer of the security. b. Publicly held firms issue new shares of stock. c. One shareholder sells securities to another shareholder. d. Only bonds or other debt securi ties are sold.

The secondary market is the market in which: Select one: a. The sale proceeds of a trade flow to the issuer of the security. b. Publicly held firms issue new shares of stock. c. One shareholder sells securities to another shareholder. d. Only bonds or other debt securi ties are sold.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter14: Corporation Accounting

Section: Chapter Questions

Problem 15MC: Stockholders equity consists of which of the following? A. bonds payable B. retained earnings and...

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Question

The secondary market is the market in which:
Select one:
a. The sale proceeds of a trade flow to the issuer of the security.
b. Publicly held firms issue new shares of stock.
O c. One shareholder sells securi ties to another shareholder.
d. Only bonds or other debt securities are sold.

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Which of the following would NOT be considered a secondary market transaction? Select one: O a. A buy order to a dealer for outstanding bonds of a company trading OTC. O b.A buy order to an investment banker for a new IPO stock offering. O CA buy order to a broker for shares of stock in a company on NYSE.
Which of the following statement is true? a. In brokered markets, buyers and sellers confront each other directly and bargain over price. b. Primary market is the market for trading outstanding securities. c. Preference shareholders have a higher priority claim on company’s assets than ordinary shareholders in the event of insolvency. d. Ordinary shareholders receive fixed dividend payments.
Secondary Market can be best described in which of the following statement? a. It is a market for an unlisted company to raise equity capital. b. It is a market where securities are issued through private placement. c. It is a market in which short-term money market instruments such as Treasury bills are traded. d. It is a market in which preowned securities are traded.
Select the item that best fits each description A through H. Description A. Records and tracks the bondholders' names. B. Is unsecured; backed only by the issuer's credit standing. C. Has varying maturity dates for amounts owed. D. The legal contract between the issuer and the bondholders. E. Can be exchanged for shares of the issuer's stock. F. Is unregistered; interest is paid to whoever possesses them. G. Maintains a separate asset account from which bondholders are paid at maturity. H. Pledges specific assets of the issuer as collateral. Items Bearer bond Bond indenture Convertible bond Debenture Registered bond Secured bond
Tell whether the following statements describe the characteristics of stocks or bonds. e. Issues of a stake of ownership in a company. f. Investment that generally have higher reward. g. Debt that is made with an investors for cash exchange for interest. h. Investors can earn money if the security increases, but they can lose money if the security decreases. i. The seller agrees to pay interest on the loan at a fixed rate and schedule.
1. A share lending agreement (a) usually stipulates that the dividends, paid by the issuing company to the security lender, are passed onto the security borrower. (b) stipulates the interest rate paid by the security borrower to the security lender. (c) guarantees that the voting right is kept by the security lender during the loan period. (d) usually stipulates that the equivalent of the dividends on the share lent are paid by the security borrower to the security lender.
A market where investors trade previously issued securities without the issuing companies involvement O Primary market O Secondary market O Stock market O Financial security market
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2. Statement 1: Debt securities represent ownership in a firm that would entitle the holders certain dividends and claims in a firm. Statement 2: Equity securities are loans made by the issuing firm that wouldentitle the holders certain interest andmaturity value. Statement 3: Debt securities include bonds, certificates of deposits, promissorynotes, government notes and bills. Statement 4: Equity securities include preferred and common stocks. Statement 5: Derivative securities include instruments whose underlying assets are bonds, stocks, commodities, currencies, interest rates and other assets. a. All statements are true b.Statements 1, 2 and 3 are true c.Statements 2, 3 and 4 are true d.Statements 3, 4 and 5 are true e.Statements 1,3 and 5 are true f. Statements 2, 4 and 5 are true 3. Which is correct about financial securities? a. Financial securities guarantees retum to investors. b. Financial securities eliminate risk that most financial managers are facing. c. Diversification…
Stockholders equity consists of which of the following? A. bonds payable B. retained earnings and accounts receivable C. retained earnings and paid-in capital D. discounts and premiums on bond payable
Which of the following statements is correct in regard to trading bond investment? a. Trading bond investments are held with the intention of selling them in a short period of time b. Unralized gains and losses are reported as part of income c. both are correct d. both are incorrect