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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

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: Mr. and Mrs. Smith buy a new house in Walnut Creek, California. They paid the entire amount, $800, 000, in cash. You need gasoline now, so you drive to the gas station and purchase 10 gallons of gasoline. Sheila saves $10, 000 and buys a certificate of deposit (CD) that will mature in six months. The state of California issues new bonds to the public with an investment bank serving as the underwriter to raise capital. A hedge fund purchased credit default swaps on securities it did not own because it believed that the securities were likely to default. In this example, the hedge fund is _______.

 

Apr 22 2020 View more View Less

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