Question

For what kinds of needs do you think a firm would issue securities in the money market versus the capital market? A firm would issue securities in the money market versus the capital market because: (Select all the answers that apply) A. Transactions in short-term debt instruments, or marketable securities, take place in the money market ? B. Capital markets are typically used for fixed assets, which a company will use over several years. C. Money markets are short-term markets, so firms using these would be in need of funds for less than a year. D. Long-term securities-bonds and stocks-are traded in the capital market and the money market

Answer 1

Answer:

Answers are A , B and C

Explanation:

A : Transactions in short term debt instruments which are ranged less than twelve months (for example,commercial paper,treasury bills, govt bonds etc.,) and also marketable securities ( only specific marketable securities which are highly liquid and due within 3 months) takers place in the money market.

B : In order to raise finance in the capital markets, issuers typically require a high Equity securities represent an ownership claim to the assets of a company. A preferred share is a special type of security which has a fixed periodic and hence Capital markets are typically used for fixed assets, which company will use over several years.

C : Money Markets are short term markets, where funds are invested for a shorter time - usually one year or less.