C) money received today is more valuable than money received in the future because firms and individuals can invest money they have today and earn a return on that money D) because of the principal-agent problem, investors cannot trust that money firms promise to pay in the future will ever arrive 5) Financial markets are forums in which suppliers of funds and demanders of funds can transact business directly. Which of the following is correct with regard to transactions in financial markets? A) Transactions in short-term marketable securities take place in the capital market B) Transactions in long-term securities take place in the money market C) Transactions in short-term marketable securities take place in the money market while transactions in long-term securities take place in the capital market D) None of the above 6) Generally speaking, securities are traded either on the Primary Market or Secondary Market. When a company or government entity raises money (ie sells stocks or bonds to investors and receives cash), it issues securities in the between investors, they become part of the A) Secondary: Initially market. Once the securities begin to trade Market B) Initially, Primary C) Primary: Secondary D) Secondary: Primary 7) You instruct your broker to submit a market order to buy 100 shares of XYZ common stock. At the time, the ask price for XYZ is $117.27, and the bid price is $117.19. Since you are trying to buy XYZ stock, and you want to buy at the lowest possible price, you will pay $ share of XYZ; and the current bid/ask spread is A) $117.27; $0.08 B) $117.19; $0.27 for XYZ stock. for a C) $0.19: $117.19 D) $117.27: $0.23 8) Which of the following legal forms of organizations is characterized by unlimited liability? A) sole proprietorship B) limited partnership C) corporation D) C-corporation