1. ABC Corp. went public 3 years ago, but the company needs an infusion of cash to invest in a new project. The company decides to issue 500,000 new shares, which will trade on NASDAQ, to finance their project. Which of the following statements is true regarding this situation?
Anyone who purchases these shares on the day they're available to the public would be participating in a money market transaction.
Anyone who purchases these shares on the day they're available to the public would be participating in a secondary market transaction.
Anyone who purchases these shares on the day they're available to the public would be participating in a broker market.
None of the above
2. Which of the following is not an economic function of mutual funds?
Exploit economies of scale in trading and transaction costs
Provide an barrier between the individual investor and the abrupt changes of the marketplace
Beat the market on every occasion
Provide the individual investor with the professional expertise necessary to earn abnormal returns through successful analysis of securities
Provide the individual investor the opportunity to diversify