CFA Practice Question

There are 490 practice questions for this study session.

CFA Practice Question

The primary market(s) for U.S. Treasury securities is (are) ______.

I. the New York Bond Exchange
II. Federal Reserve System auctions
III. a series of distribution arrangements with large U.S. banks
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.
You need to log in first to add your comment.