41. What is the role of a custodian in capital markets?
a. Assessing the creditworthiness of borrowers and issuers
b. Providing loans to companies for capital investments
c. Safeguarding and holding securities on behalf of investors
d. Regulating the issuance of government securities
42. Which of the following is an example of a primary market transaction?
a. Buying shares of a company from another investor
b. Purchasing government bonds in the secondary market
c. Participating in an initial public offering (IPO)
d. Trading options contracts on a stock exchange
43. The process of converting private company shares into publicly traded shares is called:
a. Stock dilution
b. Reverse merger
c. Initial public offering (IPO)
d. Secondary offering
44. Which entity is responsible for regulating and overseeing capital markets in the United States?
a. Securities and Exchange Commission (SEC)
b. Federal Reserve System (Fed)
c. Financial Industry Regulatory Authority (FINRA)
d. Commodity Futures Trading Commission (CFTC)
45. What is the role of credit rating agencies in debt markets?
a. Determining the interest rates on loans and bonds
b. Assessing the creditworthiness of borrowers and issuers
c. Facilitating the trading of government securities
d. Regulating the issuance of corporate bonds
