which of the following statements is correct? the nyse does not exist as a physical location. rather it…

which of the following statements is correct? the nyse does not exist as a physical location. rather it represents a loose collection of dealers who trade stock electronically. an example of a primary market transaction would be your uncle transferring 100 shares of walmart stock to you as a birthday gift. capital market instruments include both long - term debt and common stocks. if your uncle in new york sold 100 shares of microsoft through his broker to an investor in los angeles, this would be a primary market transaction. while the two frequently perform similar functions, investment banks generally specialize in lending money, whereas commercial banks generally help companies raise large blocks of capital from investors.

which of the following statements is correct? the nyse does not exist as a physical location. rather it represents a loose collection of dealers who trade stock electronically. an example of a primary market transaction would be your uncle transferring 100 shares of walmart stock to you as a birthday gift. capital market instruments include both long - term debt and common stocks. if your uncle in new york sold 100 shares of microsoft through his broker to an investor in los angeles, this would be a primary market transaction. while the two frequently perform similar functions, investment banks generally specialize in lending money, whereas commercial banks generally help companies raise large blocks of capital from investors.

Answer

Brief Explanations:

  1. The NYSE is a physical location with a trading floor, so the first statement is incorrect.
  2. A primary - market transaction involves the issuance of new securities by a company. Transfer of existing shares (like the uncle - to - you transfer) is a secondary - market transaction, so the second statement is incorrect.
  3. Capital market instruments are long - term financial instruments, and long - term debt and common stocks are examples, so this statement is correct.
  4. Selling existing shares (uncle selling Microsoft shares) is a secondary - market transaction, not a primary - market one, so the fourth statement is incorrect.
  5. Investment banks help companies raise capital, and commercial banks generally specialize in lending money, so the fifth statement has the functions reversed and is incorrect.

Answer:

C. Capital market instruments include both long - term debt and common stocks.