Chapter 2 Assignment Back to Assignment Attempts: Keep the Highest: /20 A-Z 1. Types of financial markets Financial markets across economies involve various kinds of participants and trade various types of assets and securities. It is important to understand the kinds of markets in which financial transactions take place. You are preparing to take an exam in your finance class, and you've been making flash cards on different markets and transactions. Indicate the markets in which each of the following transactions will be traded: Type of Market Description of Transaction Mr. and Mrs. Smith buy a new house in Walnut Creek, California. They paid the entire amount, $800,000, in cash Physical asset markets Financial asset markets Description of Transaction An investor buys $10,000 worth of gold at a certain price today. Type of Market Type of Market Description of Transaction Abbey allocates 80% of her portfolio for investments in short-term US Treasury bills. Type of Market Description of Transaction US banks raise additional capital by Issuing new stocks and bonds to repay the money they received from the government during the 2008 financial crisis. amount, ,, in cash Description of Transaction An investor buys $10,000 worth of gold at a certain price today, Type of Market Description of Transaction Abbey allocates 80% of her portfolio For Investments in short-term US Treasury bills. Type of Market Description of Transaction Type of Market US banks raise additional capital by issuing new stocks and bonds to repay the money they rece hedging povernment during the 2008 financial crisis. speculating A bank purg default swap from another financial institution to protect itself against the default of one of its borrowers. In this example, the bank is Grade It Now Save & Continue Continue without saving