Question

Which of the following is incorrect?

I.Season equity offering is an example of secondary market:

II.Underwriting are typically done by Federal Reserve Bank

III.In NASDAQ, all trading occurs through a specialist.

IV.In Auction market such as NYSE, one order may be filled at multiple prices.

A.I, II, and III

B.I

C.I and IV

D.I,II,III, and IV

Answer 1

B.I(I.Season equity offering is an example of secondary market:)

Explanation

• A seasoned issue is an issue of additional securities from an established company whose securities already trade in the secondary market. A seasoned issue is also known as a seasoned equity offering or follow-on public offering (FPO). New shares issued by blue-chip companies are considered seasoned issues. Outstanding bonds trading in the secondary markets are also called seasoned issues.
• Underwriting is the process that banks and other financial institutions use to assess the creditworthiness or risk of a potential borrower. During this stage of the loan process, the underwriter checks the borrower’s ability to repay the loan based on an analysis of their credit history, collateral, and capacity. Underwriting typically happens behind the scenes, but it is a crucial aspect of loan approvals.
• The New York Stock Exchange (NYSE), sometimes referred to as “the big board,” is the oldest and largest stock exchange in the United States. The NYSE is the place investors think of when they picture traders shouting out prices and making wild hand gestures in a visually chaotic live securities auction process known as open outcry.The process for setting opening and closing prices is more than just an auction. The auction process is an intentional effort to facilitate trading in a highly complex market place. The auction market blends high technology, human interaction, and highly specialized language of its own to create an efficient arena in which business is transacted. It blends a high volume of trade requests from a diverse array of investors into a seamless effort that takes place in real-time. And best of all, from an investor’s perspective, the process takes place seamlessly and instantly