images

images CHAPTER 11 images

Securities and Markets

Chapter Learning Objectives...

AFTER STUDYING THIS CHAPTER, YOU SHOULD BE ABLE TO DO THE FOLLOWING:

  • Describe the processes and institutions used by businesses to distribute new securities to the investing public.
  • Outline the recent difficulties and changes in structure of the investment banking industry.
  • Describe how securities are traded among investors.
  • Identify the regulatory mechanisms by which the securities exchanges and the over-the-counter (OTC) markets are controlled.
  • Explain influences that affect broker commissions.

Where We Have Been...

For the savings process to work, funds must be routed from savings to the users of funds. Banks and other financial institutions assist with this process; so do securities markets. Chapter 10 introduced us to the characteristics of stocks and bonds, how they can be priced using time value concepts, and the risks that investors face when holding them. Supply and demand forces in financial markets set market prices for securities. Interest rates and asset prices rise and fall based upon investors' and issuers' desires to buy and sell securities.

Where We Are Going...

The process of raising funds in securities ...

Get Introduction to Finance: Markets, Investments, and Financial Management, 15th Edition now with O’Reilly online learning.

O’Reilly members experience live online training, plus books, videos, and digital content from 200+ publishers.