20. Primary markets are large and important, while secondarymarkets are smaller and less important.

True or False

21. The annual rate of return on any given stock canbe found as the stock's dividend for the year plus the change inthe stock's price during the year, divided by its beginning-of-yearprice.

True or False

22.

Which of the following statements is NOT CORRECT?

	a.	When a corporation's shares are owned by a few individuals, wesay that the firm is "closely, or privately, held."
	b.	When stock in a closely held corporation is offered to thepublic for the first time, the transaction is called "going public,or an IPO," and the market for such stock is called the new issueor IPO market.
	c.	It is possible for a firm to go public and yet not raise anyadditional new capital for the firm itself.
	d.	The stock of publicly owned companies must generally beregistered with and reported to a regulatory agency such as theSEC.
	e.	"Going public" establishes a firm's true intrinsic value andensures that a liquid market will always exist for the firm'sshares.

23.

If you decide to buy 100 shares of Google, you would probably doso by calling your broker and asking him or her to execute thetrade for you. This would be defined as a secondary markettransaction, not a primary market transaction.

True or False

24.

Which of the following statements is CORRECT?

	a.	If you purchase 100 shares of Disney stock from yourbrother-in-law, this is an example of a primary markettransaction.
	b.	As they are generally defined, money market transactions involvedebt securities with maturities of less than one year.
	c.	The NYSE is an example of an over-the-counter market.
	d.	Only institutions, and not individuals, can engage in derivativemarket transactions.
	e.	If Disney issues additional shares of common stock through aninvestment banker, this would be a secondary markettransaction.