Questions 1. Classify the following transactions as taking place in the primary or secondary markets: a. IBM issues $200 million of new common stock – primary market b. The New Company issues $50 million of common stock in an IPO – primary market c. IBM sells $5 million of GM preferred stock out of its marketable securities portfolio – secondary market d. The Magellan Fund buys $100 million of previously issued IBM bonds – secondary market e. Prudential Insurance Co. sells $10 million of GM common stock – secondary market
2. Classify the following financial instruments as money market securities or capital market securities: a. Federal Funds – money market security b. Common Stock – capital market security c. Corporate Bonds – capital market security d. Mortgages – capital market security e. Negotiable Certificates of Deposit – money market security f. U.S. Treasur...
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