Assignment Bb0022 Capital and Money Market
Bachelor of Business Administration
Samester-5th
BB0022 Capital and Money Market
ASSIGNMENT
From:
Name: Hemant Kumar
Roll No: 511116559
Q 1: Explain the securities market and discuss the methods of underwriting the securities.
Answer: Securities market is an economic institute, which within takes place the sale and purchase transactions of securities between subjects of the economy, on the base of demand and supply. Also we can say that securities market is a system of interconnection between all participants (professional and nonprofessional) that provides effective conditions to buy and sell securities, and also to attract new capital by means of issuance new security to transfer real asset into financial asset, to invest money for short or long term periods with the aim of deriving profit, commercial function to derive profit from operation on this market, price determination (demand and supply balancing, the continuous process of prices movements guarantees to state correct price for each security so the market corrects mispriced securities), informative function (market provides all participants with market information about participants and traded instruments), regulation function (securities market creates the rules of trade, contention regulation, priorities determination)
METHODS OF UNDERWRITING THE SECURITIES:
1. LETTER OF INTENT A letter of intent (LOI) is an agreement to proceed with the registration of securities with the Securities and Exchange Commission (SEC). The contents of the LOI state, as clearly as possible, the duties and obligations of the parties are as follows:
a. A nonbinding letter of intent requires a good-faith deposit from the company to demonstrate its financial capacity to complete the costly and cumbersome process of going public. In a binding LOI the entrepreneur is responsible for payment of certain costs whether or not the securities are actually issued.
b. LOIs
Samester-5th
BB0022 Capital and Money Market
ASSIGNMENT
From:
Name: Hemant Kumar
Roll No: 511116559
Q 1: Explain the securities market and discuss the methods of underwriting the securities.
Answer: Securities market is an economic institute, which within takes place the sale and purchase transactions of securities between subjects of the economy, on the base of demand and supply. Also we can say that securities market is a system of interconnection between all participants (professional and nonprofessional) that provides effective conditions to buy and sell securities, and also to attract new capital by means of issuance new security to transfer real asset into financial asset, to invest money for short or long term periods with the aim of deriving profit, commercial function to derive profit from operation on this market, price determination (demand and supply balancing, the continuous process of prices movements guarantees to state correct price for each security so the market corrects mispriced securities), informative function (market provides all participants with market information about participants and traded instruments), regulation function (securities market creates the rules of trade, contention regulation, priorities determination)
METHODS OF UNDERWRITING THE SECURITIES:
1. LETTER OF INTENT A letter of intent (LOI) is an agreement to proceed with the registration of securities with the Securities and Exchange Commission (SEC). The contents of the LOI state, as clearly as possible, the duties and obligations of the parties are as follows:
a. A nonbinding letter of intent requires a good-faith deposit from the company to demonstrate its financial capacity to complete the costly and cumbersome process of going public. In a binding LOI the entrepreneur is responsible for payment of certain costs whether or not the securities are actually issued.
b. LOIs