4. Finance companies raise funds in the money markets primarily by selling: (Poi

Question

4. Finance companies raise funds in the money markets primarily by selling: (Points : 3) commercial paper federal funds negotiable certificates of deposit O bankers' acceptances 5. The Fed can lower the federal funds rate by: (Points: 3) O selling securities, thereby adding reserves O selling securities, thereby lowering reserves buying securities, thereby adding reserves O buying securities, thereby lowering reserves the Fed doesn't need to do any of these-the fed funds rate is an administered rate 6. Which of the following are secondary markets? (Points :3) the New York Stock Exchange O NASDAQ e) the U.S. government bond market O none of the above (a), (b), and (c) are all secondary markets 7. Which statement does not describe banker's acceptances? (Points : 3) It is an order to pay a specified amount of money to the bearer on a given date. It is a relatively new money market security, having developed only in the late 1970s, but l

Explanation / Answer

4.

Finance companies raise short term fund in money market primarily by selling commercial paper.

Option (A) is correct answer.

5.

The Fed can lower the Federal Fund rate by buying securities, thereby adding reserve.

Option (C) is correct answer.

6.

Secondary market is type of market where Old issued stock are traded. Example of secondary market is The New York stock exchange, NASDAQ, The US government bond market or any stock exchange market in world.

So, Option (A), option (B) and option (C) is correct answer.

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