Question

Which of the following statements is NOT CORRECT?

A.Mutual funds usually invest their money in a well-diversified portfolio of various financial securities such as stocks or bonds
B.The New York Stock Exchange is an auction market, and it has a physical location.
C.Money markets are markets for long-term financial securities such as perferred stocks and common stocks.
D.Your uncle purchased 200 shares of Starbucks stock through a brokergge firm, this is a secondary market transaction.

Answer 1

The incorrect statement is that money markets deal with long-term financial securities, whereas they actually handle short-term instruments.

Step-by-step explanation:

The statement that is NOT CORRECT is: C.Money markets are markets for long-term financial securities such as preferred stocks and common stocks. Money markets actually deal with short-term financial instruments, typically those that mature in less than one year. In contrast, capital markets are where long-term financial securities like preferred and common stocks are traded. Mutual funds indeed invest in a diversified portfolio of financial securities, the New York Stock Exchange (NYSE) is an auction market with a physical location, and purchasing stocks through a brokerage firm is an example of a secondary market transaction.