Assignment: Financial Markets And Institutions
Respond to the following five questions. Write your responses in a Word document, and number them 1-5.
1. Categorize each of the following transactions as taking place in either the primary or secondary market:
o Supercorp issues $180 million of new common stock.
o HiTech, Inc. issues $30 million of common stock in an IPO.
o Megaorg sells $10 million of HiTech preferred stock from its marketable securities portfolio.
o The XYA Fund buys $220 million of previously issued Supercorp bonds.
o A. B. Corporation sells $15 million of XYZ common stock.
2. Identify whether the following financial instruments are capital market securities or money market securities:
o U.S. Treasury bills.
o U.S. Treasury notes.
o U.S. Treasury bonds.
o Mortgages.
o Federal funds.
o Negotiable certificates of deposit.
o Common stock.
o State and government bonds.
o Corporate bonds.
3. Identify the different types of financial institutions. What are the main services each of these financial institutions offers?
4. Define the six factors that determine the nominal interest rate on a security.
5. Define the concept of term structure of interest rates. What are three theories that explain the future yield curve of interest rates?
Format your assignment according to the following formatting requirements:
1. The answer should be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides.
2. The response also includes a cover page containing the title of the assignment, the student's name, the course title, and the date. The cover page is not included in the required page length.
3. Also include a reference page. The Citations and references should follow APA format. The reference page is not included in the required page length.