Question

Which of the following statements is correct?

Select one:

a. The primary bondholders are small individual investors.

b. Municipal bonds are bonds issued by local governments

c. Banks can issue bonds as a way to lend money to the public

d. In terms of capitalization, global stock market is larger than global bond market

e. The bond trading is mainly conducted on the exchange floor.

Answer 1

Option b is correct.

a. The primary bondholders are small individual investors. Incorrect. Primary bondholders are institutional investors.

b. Municipal bonds are bonds issued by local governments. Correct.

c. Banks can issue bonds as a way to lend money to the public. Incorrect. Banks use bonds to raise funds

d. In terms of capitalization, global stock market is larger than global bond market. Incorrect. Global bond market is more than 3 times larger than Global stock market.

e. The bond trading is mainly conducted on the exchange floor. Incorrect. Bonds are traded mainly through dealers.