Question

Which of the following statements is incorrect? Group of answer choices

a) The nominal rate of interest is composed of two parts: (1) the real rate of interest and (2) the expected rate of inflation.
b) The secondary markets are not well known to the general public because they are wholesale markets and the sales take place outside of the public view.
c) Examples of real assets are plant and equipment.
d) Brokers are market specialists who do not bear the risk of owning securities.
e) All the answers are correct except one.

Answer 1

The incorrect statement is the one suggesting that secondary markets are not well known to the general public because sales take place outside of public view, which is false since these markets are accessible and transactions are public through exchanges.

Step-by-step explanation:

The statement which is incorrect among the provided choices is:

b) The secondary markets are not well known to the general public because they are wholesale markets and the sales take place outside of the public view.

This statement is incorrect because the secondary markets are in fact well known to the general public. While it is true that these markets operate on a wholesale level, significant transactions and trading are visible and accessible to the public, especially through stock exchanges where securities are bought and sold regularly. The accessibility of these markets is in part due to technological advancement and the establishment of regulated exchanges.