3-1 "What is a financial market? What is the role of a financial market?

3-2What would happen to the standard of living in the United States if people lost faith in our financial markets? Why?

3-3How does a cost-efficient capital market help to reduce the prices of goods and services?3-4The SEC attempts to protect investors who are purchasing newly issued securities by requiring issuers to provide relevant financial information to prospective investors. The SEC does not provide an opinion about the real value of the securities. Hence, an unwise investor might pay too much for some stocks and consequently lose heavily. Do you think the SEC should, as a part of every new stock or bond offering, render an opinion to investors on the proper value of the securities being offered? Explain.

3-5 How do you think each of the following would affect a company's ability to attract new capital and the flotation (issuing) costs involved in doing so?a.The decision to list a company's stock; the stock now trades in the over-the-counter market

b.The decision of a privately held company to go public

c.An increasing importance of institutions in the stock and bond markets

d.The continuing trend toward financial conglomerates as opposed to stand-alone investment banking houses"