Which of the following statements is CORRECT?

barbiegrl74: Which of the following statements is CORRECT?
A. The most important difference between spot markets versus futures markets is the maturity of the instruments that are traded. Spot market transactions involve securities that have maturities of less than one year whereas futures markets transactions involve securities with maturities greater than one year.
B. Capital market transactions involve only preferred stock or common stock.
C. If General Electric were to issue new stock this year, it would be considered a secondary market transaction since the company already has stock outstanding.
D. Both Nasdaq dealers and �specialists� on the NYSE hold inventories of stocks
E. Money market transactions do not involve securities denominated in currencies other than the U.S. dollar.

Answers and Views:

Answer by Bill B
Barbie,

In no particular order, the following are wrong:

C. Since GE has common stock outstanding, a new offering would be a secondary market offering. If they were private and going public for the first time, it would be an initial public offering. BUT wait – the answer said secondary market transaction NOT secondary offering – big difference. See https://www.investopedia.com/university/stocks/stocks3.asp

A is wrong – check out this example: https://www.kitco.com/glossary/LiveSpotGold.html

B is wrong – what about warrants – neither common or preferred, and let’s not forget about bonds. Also see https://capitalmarkets.cbre.com/

E isn’t right either. Here’s a fund that holds both US dollars and Euros.

That leaves us with D. We know this is the right answer because we’ve eliminated the others and because this link tells us they both hold inventory.
https://www.investopedia.com/ask/answers/128.asp

Hope that helps!