Which of the following statements is CORRECT? A. While the distinctions are beco

Question

Which of the following statements is CORRECT? A. While the distinctions are becoming blurred, commercial banks generally specialize in lending money, whereas investment banks generally help companies raise capital from other parties. B. Money market mutual funds usually invest their money in a well-diversified portfolio of liquid common stocks. C. The NYSE operates as a dealer market, whereas NASDAQ is an example of an auction market. D. Hedge funds are legal in the United States, but they are not permitted to operate in Europe or Asia.

Explanation / Answer

A) Correct.

Usually, commercial banks should give loans and investment banks helps companies in raising capital by issuing equity or debt securities

B) Wrong.

Money market instruments usually invest in treasury bills and commercial paper not in common stocks

C) Wrong

NYSE is an auction market as investors meet directly on the trading floor

NASDAQ is dealer markey

D) Wrong

Actually hedge funds are legal in europe and asia

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