1. How does a cost-efficient capital market help reduce the prices of goods and services?

2. Describe the different ways in which capital can be transferred from suppliers of capital to those who are demanding capital.

3. Is an initial public offering an example of a primary or a secondary market transaction?

4. Indicate whether the following instruments are examples of money market or capital market securities.

a. U.S. Treasury bills

b. Long-term corporate bonds

c. Common stocks

d. Preferred stocks

e. Dealer commercial paper

5. What would happen to the U.S. standard of living if people lost faith in the safety of the finabcial institutions? Explain.