MARKETS AND INSTITUTIONS ACTUAL
EXAM SCRIPT 2026 FULL QUESTIONS AND
CORRECT ANSWERS GRADED A+
●● What are the two major dimensions to distinguish financial markets?
Answer: Primary versus secondary markets and money versus capital
markets.
●● What are primary markets? Answer: Markets where users of funds
raise capital through new issues of financial instruments, such as stocks
and bonds.
●● What is an initial public offering (IPO)? Answer: The process where
a firm issues equity to the public for the first time.
●● What are secondary markets? Answer: Markets that trade financial
instruments after they have been issued.
●● What is liquidity in financial markets? Answer: The ability to quickly
turn an asset into cash at its fair market value.
●● What do secondary markets provide investors? Answer: Liquidity,
information about prices, and trading with low transaction costs.
EXAM SCRIPT 2026 FULL QUESTIONS AND
CORRECT ANSWERS GRADED A+
●● What are the two major dimensions to distinguish financial markets?
Answer: Primary versus secondary markets and money versus capital
markets.
●● What are primary markets? Answer: Markets where users of funds
raise capital through new issues of financial instruments, such as stocks
and bonds.
●● What is an initial public offering (IPO)? Answer: The process where
a firm issues equity to the public for the first time.
●● What are secondary markets? Answer: Markets that trade financial
instruments after they have been issued.
●● What is liquidity in financial markets? Answer: The ability to quickly
turn an asset into cash at its fair market value.
●● What do secondary markets provide investors? Answer: Liquidity,
information about prices, and trading with low transaction costs.
