TRUE OR FALSE (10 items x 1 point)

Identify whether the given item is TRUE or FALSE. SHADE the corresponding circle for the correct answer.

T F
1. The financial market refers to channels or places where funds and financial instruments
such as stocks, bonds, and other securities are exchanged between willing individuals or
entities.
2. Borrowers and lenders are also known as surplus economic units and deficit economic
units, respectively.
3. The secondary market is a type of financial market wherein fund demanders such as
corporations or government agencies raise funds through new issuance of financial
instruments.
4. The issuer of financial security does not directly benefit from secondary trades as the
transaction is between the previous holder of the bond to another buyer.
5. All types of financial markets offer financial instruments with a similar degree of liquidity.

6. Limited public offer is usually used for issuance of treasury bills, bonds, and other
securities issued by the government and are commonly executed exclusively with market
makers.
7. The auction occurs when the issuers are open to receive bids for their securities at all
times.
8. In a dealer market, the buyer and the seller are brought together by a broker and the trade
occurs.
9. A public offering is done by issuing a prospectus or placing a document which contains
an offer to the general public to purchase or subscribe to securities at a stated price.
10. Underwriting means that the investment banks guarantee the price for the securities of the
issuing company, and then sell them to the general public