1. Classify the following transactions as taking place in the primary or secondary markets: (LG 1-1)

a. IBM issues $200 million of new common stock. b. The New Company issues $50 million of common stock in an IPO. c. IBM sells $5 million of GM preferred stock out of its marketable securities portfolio. d. The Magellan Fund buys $100 million of previously issued IBM bonds. e. Prudential Insurance Co. sells $10 million of GM common stock.

2. Classify the following financial instruments as money market securities or capital market securities: (LG 1-2) a. Banker's acceptances b. Commercial paper c. Common stock d. Corporate bonds e. Mortgages f. Negotiable certificates of deposit g. Repurchase agreements h. U.S. Treasury bills i. U.S. Treasury notes j. Federal funds

3. What are the major instruments traded in capital markets?

4. What are the different types of financial institutions? Include a description of the main services offered by each.

5. How do FIs reduce monitoring costs associated with the flow of funds from fund suppliers to fund investors? (LG 1-6)

6. Why are FIs regulated?

7. What events resulted in banks' shift from the traditional banking model of "originate and hold" to a model of "originate and distribute"? ( LG 1-6, LG 1-7, LG 1-8 )

8. Elaborate your career interests in the financial services industry. Which markets/institutions interest you the most?