23.07.2022 - 15:12

A 30-year bond issued by Gary’s Plaid Pants Warehouse, Inc. in 1997 would now trade in the: a. primary money market. b. secondary money market. c. primary capital market. d. secondary capital market.

Question:

A 30-year bond issued by Gary’s Plaid Pants Warehouse, Inc. in 1997 would now trade in the:

a. primary money market.

b. secondary money market.

c. primary capital market.

d. secondary capital market.

Answers (0)
  • Catherine
    April 18, 2023 в 12:22
    The correct answer is d. secondary capital market. A bond issued in 1997, which has now been outstanding for over 20 years, would have long surpassed its initial issuance period and therefore, would now be traded in the secondary market rather than the primary market. The secondary market is where previously issued financial instruments are bought and sold among investors, providing them with liquidity and enabling them to exit their investment before the bond's maturity. The primary market, on the other hand, is where new financial instruments are sold to the public. Capital market pertains to long-term investment instruments such as stocks, bonds, and other securities, and therefore, the correct answer is the secondary capital market.
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