- CFA Exams
- CFA Level I Exam
- Study Session 14. Fixed Income (1)
- Reading 43. Fixed-Income Markets: Issuance, Trading, and Funding
- Subject 2. Primary and Secondary Bond Markets
CFA Practice Question
The primary market(s) for U.S. Treasury securities is (are) ______.
II. Federal Reserve System auctions
III. a series of distribution arrangements with large U.S. banks
IV. NASDAQ
I. the New York Bond Exchange
II. Federal Reserve System auctions
III. a series of distribution arrangements with large U.S. banks
IV. NASDAQ
A. II only
B. I, II and IV
C. III only
Explanation: The Federal Reserve (the Fed) auctions bonds for the Treasury as a service. The Treasury does not have direct contact with the financial markets, whereas the Fed interacts in the markets in the regular course of business, most directly with the approved government bond dealers with whom it deals in the conduct of monetary policy.
User Contributed Comments 6
| User | Comment |
|---|---|
| murli | Primary market is FOMC only! |
| iceluke | as murli says! |
| AkuK | What is the secondary market for US Ts? |
| boddunah | chicago trade of exchange- secondary. |
| MikeWeeks | MF Global was an approved government bond dealer. What does that tell you? |
| leftcoast | Aren't primary dealers "a series of distribution arrangements with large US banks"? MikeWeeks, MF Global was a poorly run company that made some very bad decisions. What that has to do with government bonds is beyond me. |