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BUS FP3062 McAndrewVanessa Assessment2 Attempt1

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Running head: MARKETS 1
Markets
Vanessa McAndrew
Capella University

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MARKETS 2
1. Primary market and secondary market
Primary market-investor buys securities directly from company issuing them. For example, a
company sells new stock through an initial public offering. (Merton, 1987)
Supercorp issues $180 million of new common stock.
HiTech, Inc. issues $30 million of common stock in an IPO.
Secondary markets such as New York Stock Exchange are used by investors to trade securities
using their brokers.
Megaorg sells $10 million of HiTech preferred stock from its marketable securities
portfolio.
The XYA Fund buys $220 million of previously issued Supercorp bonds.
A. B. Corporation sells $15 million of XYZ common stock.
2. Capital market securities and money market securities
Money markets securities are for short term basis and usually mature within a year.
U.S. Treasury bills, U.S. Treasury notes and negotiable certificates of deposit
Capital market securities are long term assets (Arrow 1964)
U.S. Treasury bonds, mortgages, Federal funds, common stock, state and government
bonds and corporate bonds.
3. Types of financial institutions
Commercial banks safe keep their customer's money, provide personal and business loans and
act as a payment agent in business transactions. Investment banks that provide financial advisory
services to companies facilitate equity offerings such initial public offerings and act as brokers
for institutional clients.

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Running head: MARKETS 1 Markets Vanessa McAndrew Capella University MARKETS 2 1. Primary market and secondary market Primary market-investor buys securities directly from company issuing them. For example, a company sells new stock through an initial public offering. (Merton, 1987) • Supercorp issues $180 million of new common stock. • HiTech, Inc. issues $30 million of common stock in an IPO. Secondary markets such as New York Stock Exchange are used by investors to trade securities using their brokers. • Megaorg sells $10 million of HiTech preferred stock from its marketable securities portfolio. • The XYA Fund buys $220 million of previously issued Supercorp bonds. • A. B. Corporation sells $15 million of XYZ common stock. 2. Capital market securities and money market securities Money markets securities are for short term basis and usually mature within a year. • U.S. Treasury bills, U.S. Treasury notes and negotiable certificates of deposit Capital market securities are long term assets (Arrow 1964) • U.S. Treasury bonds, mortgages, Federal funds, common stock, state and government bonds and corporate bonds. 3. Types of financial institutions Commercial banks safe keep their customer's money, provide personal and business loans and act as a payment agent in business transactions. Investment banks that provide financial advisory services to companies facilitate equity offerings such initial public offerings and act as brokers for instituti ...
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