1. Which of the following statements is (are) correct?
(x) Primary markets provide a forum in which demanders of fundsraise funds by issuing new financial instruments, such as stocksand bonds.
(y) Primary market financial instruments include stock issues fromfirms allowing their equity shares to be publicly traded on stockmarket for the first time. We usually refer to these first-timeissues as initial public offerings
(z) Money markets feature debt securities or instruments withmaturities of more than one year.
A. (x), (y) and (z)
B. (x) and (y) only
C. (x) and (z) only
D. (y) and (z) only
E. (x) only

2. Which of the following statements is (are) correct?
(x) Once firms issue financial instruments in primary markets,these same stocks and bonds are then traded in secondarymarkets
(y) Once firms issue financial instruments such as stock in primarymarkets, no money accrues to a corporation when its stock sells inthe secondary market.
(z) In the United States, investment banks are the financialinstitutions that arrange most secondary market
transactions for businesses.
A. (x), (y) and (z)
B. (x) and (y) only
C. (x) and (z) only
D. (y) and (z) only
E. (x) only

3. Which of the following statements is (are) correct?
(x) U.S. Treasury notes and bonds, U.S. government agency bonds andcorporate stocks and bonds are
capital market instruments
(y) Treasury bills, commercial paper, and banker's acceptances areall money market instruments but
corporate stocks and bonds are not
(z) Federal funds, repurchase agreements, and commercial paper areincluded in the category of money market instruments
A. (x), (y) and (z)
B. (x) and (y) only
C. (x) and (z) only
D. (y) and (z) only
E. (z) only

7. According to the textbook, which of the following statementsis (are) correct?
(x) Money markets are subject to wider price fluctuations and aretherefore more risky than capital market
instruments.
(y) Mortgages are capital market instruments that are long-termloans to individuals or businesses to
purchase homes, pieces of land, or other real property.
(z) A derivative security is a security formalizing an agreementbetween two parties to exchange a standard
quantity of an asset at a predetermined price on a specified datein the future.
A. (x), (y) and (z)
B. (x) and (y) only
C. (x) and (z) only
D. (y) and (z) only
E. (y) only