DISCUSSION QUESTIONS 1. In addition to U.S. corporations, what government groups compete for funds in the U.S. capital markets? (LOI4-2). 2. In which foreign industry has privatization been most important? (LOI4-1) 3. How does foreign investment help the U.S. government? (LOI/4.1) 4. What is a key tax characteristic associated with state and local (municipal) securitics? (LOI/4-2) 5. What are three forms of corporate securities discussed in the chapter? (LO/4-2) 6. Do corporations rely more on external or internal funds as sources of financing? (LO/4-2) 7. Explain the role of financial intermediaries in the flow of funds through the three-sector economy. (LO/4.3) 8. What are electronic communication networks (ECNs)? Generally speaking, are they currently part of the operations of the New York Stock Exchange and the NASDAQ Stock Market? (LOI4-4) 9. Why is secondary trading in the security markets important? (LOI4-4) 10. How would you define efiicient security markets? (LOL/4.5) 11. The efficient market hypothesis is interpreted in a weak form, a semistrong form, and a strong form. How can we differentiate its various forms? (LOI4.5) 12. What was the primary purpose of the Securities Act of 1933 ? (L.O/4-6) 13. What act of Congress created the Securities and Exchange Commission? (LO/4.6) 14. What was the purpose of the Sarbanes-Oxley Act of 2002 ? (LO14-6).