Question

which of the following statements is correct? the most important difference between spot markets versus futures markets is the maturity of the instruments that are traded. spot market transactions involve securities that have maturities of less than one year whereas futures markets transactions involve securities with maturities greater than one year. capital market transactions involve only preferred stock or common stock. if general electric were to issue new stock this year, this would be considered a secondary market transaction since the company already has stock outstanding. both nasdaq dealers and \specialists\ on the nyse hold inventories of stocks. money market transactions do not involve securities denominated in currencies other than the u.s. dollar.

Explanation:

1. Spot - futures difference: Spot markets are for immediate delivery, futures for future delivery, not based on maturity as stated.
2. Capital markets: Include bonds, mortgages etc., not just stocks.
3. New stock issue: By a company is a primary market transaction.
4. NASDAQ dealers and NYSE specialists: Do hold stock inventories to facilitate trading.
5. Money markets: Can involve securities in various currencies.

Answer:

D. Both NASDAQ dealers and "specialists" on the NYSE hold inventories of stocks.