Which of the following is true of the primary market? A. It is an organized mark

ID: 2774038 • Letter: W

Question

Which of the following is true of the primary market?

A. It is an organized market in which all financial derivatives are traded

B. It is regulated by The Sarbanes-Oxley Act

C. It is a market where smaller, unlisted securities are traded

D. Is is the only market in which the issuer is directly involved in the transaction

The primary risk of mortgage-backed securities is:

A. that the government will not be able to meet the guarantees on the cash flows

B. that the homeowners may not be able to, or choose not to, repay their loans

C. that the prices of housing will increase

D. that the prices of have high volatality

The tax deductibility of various expenses such as general and administrative expenses:

A. has an unpredictable effect on their after-tax cost

B. has no effort on their after-tax cost

C. increases their pretax cost

D. reduced their after-tax cost

1. Option D

2. Option B

3. Reduces their after tax cost.

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