How does a cost$-$efficient capital market help reduce the prices of goods and services?

$2-2$

Describe the different ways in which capital can be transferred from suppliers of capital to those who are demanding capital.

$2-3$

Is an initial public offering an example of a primary or a secondary market transaction? Explain.

$2-4$

Indicate whether the following instruments are examples of money market or capital market securities$.$

U$.$S$.$ Treasury bills

Long$-$term corporate bonds

Common stocks

Preferred stocks

Dealer commercial paper

$2-5$

What would happen to the U$.$S$.$ standard of living if people lost faith in the safety of the financial institutions? Explain.

$2-6$

What types of changes have financial markets experienced during the last two decades? Have they been perceived as positive

or negative changes? Explain.

$2-7$

Differentiate between dealer markets and stock markets that have a physical location.

$2-8$

Identify and briefly compare the two leading stock exchanges in the United States today.

$2-9$

Briefly explain what is meant by the term efficiency continuum.

$2-10$

Explain whether the following statements are true or false.

Derivative transactions are designed to increase risk and are used almost exclusively by speculators who are looking to capture

high returns.