2. 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...



2. 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:



















Description of Transaction


Type of Market

Helen buys 1,000 shares of Microsoft stock through her online brokerage account.






















Description of Transaction


Type of Market

You need gasoline now, so you drive to the gas station and purchase 10 gallons of gasoline.






















Description of Transaction


Type of Market

Long-term mortgage-backed securities are traded between investors and issuers.






















Description of Transaction


Type of Market

An investor holding 3,000 shares of stock of Strata Corp. sells them to another investor.








A bank purchased a credit default swap from another financial institution to protect itself against the default of one of its borrowers. In this example, the bank is    .








Jun 07, 2022
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