Question

16. Financial institutions are more diversified today than they were in the past, when federal laws kept investment banks, commercial banks, insurance companies, and similar organizations quite separate. Today the larger financial services corporations offer a variety of services, ranging from checking accounts, to insurance, to underwriting securities, to stock brokerage.

True or false

17. The NYSE if defined at the "spot" market purely and simply because it has a physical location. The NASDAQ, on the other hand, is not a spot market because it has no one central location.

True or False

20. Primary markets are large and important, while secondary markets are smaller and less important.

True or False

Answer 1

16. Financial institutions are more diversified today than they were in the past, when federal laws kept investment banks, commercial banks, insurance companies, and similar organizations quite separate. Today the larger financial services corporations offer a variety of services, ranging from checking accounts, to insurance, to underwriting securities, to stock brokerage.

This statement is true

The financial institutions create a pool of fund by collecting the money from many small investors (savers) by paying them interest or sharing profit and then divert that capital to companies or individuals in form of loan (borrowers). Financial institutions are commercial banks, pension funds, insurance companies, mutual funds, credit companies etc. Financial institutions are more diversified today than they were in the past as they are offering variety of services to its customers.

17. The NYSE if defined at the "spot" market purely and simply because it has a physical location. The NASDAQ, on the other hand, is not a spot market because it has no one central location.

This statement is False

New York Stock Exchange (NYSE) is an auction market, where buying and selling take place between investors in an auction form. NYSE is the biggest exchange of these days where trading takes place for most of the blue chip company’s stocks.

NASDAQ is dealer’s market where trading happens through dealer networks and no trading take place on physical trading floor and it’s operate through a telecommunications network. Nasdaq is biggest over-the-counter (OTC) market of present time and trading of stocks happen of through Electronic Communications Networks (ECN) which is fully automated system.

20. Primary markets are large and important, while secondary markets are smaller and less important.

This statement is False

The capital markets are divided into primary markets and secondary markets. Newly issued securities are bought or sold in primary markets during initial public offerings. Secondary markets allow trade between investors of existing securities. Secondary markets are larger market and both markets are important.