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Fina 3317 - Exam 1 Review-Complete
Questions And Correct Answers 2026
Primary Markets - correct-answer -Markets in which users of funds (corporations)
raise funds by creating and issuing new financial instruments (securities or
contracts) to investors. Usually done by an investment bank.
• For stocks, this could be an initial public offer (IPO)
Secondary Markets ("the stock market") - correct-answer -Where existing financial
instruments (contracts/ securities/ stocks) are traded.
• NYSE and NASDAQ are the two main stock markets in the U.S.
Money Markets - correct-answer -Markets that trade debt securities with
maturities of one year or less (e.g., CDs, U.S. Treasury bills, cash).
• little or no risk of capital loss, but low return
• securities issued by private companies
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Capital Markets - correct-answer -Markets that trade debt (bonds) and equity
(stock) instruments with maturities of more than one year.
• Higher risk of capital loss, but higher promised return
• securities issued by the government
Premium/Discount/Par value bonds - correct-answer -Premium Bonds:
• price is greater than the face value
• Whenever the yield is less than the coupon rates, the
price is going to be higher than the face value.
Discount Bonds:
• price is less than the face value
• Whenever the yield is more than the coupon rates, the
price is going to be less than the face value.
Par Value Bonds
• price is equal to the face value
Fina 3317 - Exam 1 Review-Complete
Questions And Correct Answers 2026
Primary Markets - correct-answer -Markets in which users of funds (corporations)
raise funds by creating and issuing new financial instruments (securities or
contracts) to investors. Usually done by an investment bank.
• For stocks, this could be an initial public offer (IPO)
Secondary Markets ("the stock market") - correct-answer -Where existing financial
instruments (contracts/ securities/ stocks) are traded.
• NYSE and NASDAQ are the two main stock markets in the U.S.
Money Markets - correct-answer -Markets that trade debt securities with
maturities of one year or less (e.g., CDs, U.S. Treasury bills, cash).
• little or no risk of capital loss, but low return
• securities issued by private companies
, 2
Capital Markets - correct-answer -Markets that trade debt (bonds) and equity
(stock) instruments with maturities of more than one year.
• Higher risk of capital loss, but higher promised return
• securities issued by the government
Premium/Discount/Par value bonds - correct-answer -Premium Bonds:
• price is greater than the face value
• Whenever the yield is less than the coupon rates, the
price is going to be higher than the face value.
Discount Bonds:
• price is less than the face value
• Whenever the yield is more than the coupon rates, the
price is going to be less than the face value.
Par Value Bonds
• price is equal to the face value
