1. Are the following statements true or false? Briefly explain your answer. (5 points in total)

1. If a firm sells its holding of securities to raise short-term funding and agree to buy it back within a short period of time, this is called reverse repurchase agreement.
2. Derivative transactions are designed to increase risk and are used exclusively by speculators who are looking to capture high returns.
3. Mutual funds typically have large minimum investments and are marketed to institutions and individuals with high net worth.
4. A lower bid-ask spread means that the dealer will realize a lower profit
5. Organized exchange is a dealer market. All transactions will go through the dealers.