Preview

Investment Chap2

Powerful Essays
Open Document
Open Document
7451 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Investment Chap2
Chapter 2
Markets and Transactions
T Outline
Learning Goals
I. Securities Markets A) Types of Securities Markets 1. The Primary Market a. Going Public: The IPO Process b. The Investment Banker’s Role 2. Secondary Markets B) Organized Securities Exchanges 1. The New York Stock Exchange a. Trading Activity b. Listing Policies 2. The American Stock Exchange 3. Regional Stock Exchanges 4. Options Exchanges 5. Futures Exchanges C) The Over-the-Counter Market 1. New Issues and Secondary Distributions 2. The Role of Dealers 3. Nasdaq 4. Alternative Trading Systems D) General Market Conditions: Bull or Bear Concepts in Review II. Globalization of Securities Markets A) Growing Importance of International Markets B) International Investment Performance C) Ways to Invest in Foreign Securities D) Risks of Investing Internationally Concepts in Review

Chapter 2

Markets and Transactions

17

III. Trading Hours and Regulation of Securities Markets A) Trading Hours of Securities Markets B) Regulation of Securities Markets 1. Securities Act of 1933 2. Securities Exchange Act of 1934 3. Maloney Act of 1938 4. Investment Company Act of 1940 5. Investment Advisors Act of 1940 6. Securities Acts Amendments of 1975 7. Insider Trading and Fraud Act of 1988 8. Sarbanes-Oxley Act of 2002 Concepts in Review IV. Basic Types of Securities Transactions A) Long Purchase B) Margin Trading 1. Essentials of Margin Trading a. Magnified Profits and Losses b. Advantages and Disadvantages 2. Making Margin Transactions a. Initial Margin b. Maintenance Margin 3. The Basic Margin Formula 4. Return on Invested Capital 5. Uses of Margin Trading C) Short Selling 1. Essentials of Short Selling a. Making Money When Prices Fall b. Margin Requirements and Short Selling c. Who Lends the Securities? d. Advantages and Disadvantages 2. Uses of Short Selling Concepts in Review

Summary
Putting Your Investment Know-How to the Test Discussion Questions Problems Case Problems 2.1 Dara’s Dilemma: Hold, Sell, Or? 2.2
Continue Reading
View Writing Issues

You May Also Find These Documents Helpful

  • Better Essays

    Sunburns: Skin and Medical Attention
    • 910 Words
    • 4 Pages

    Sunburns: Skin and Medical Attention

    The burn would be classified as a second degree burn due to the redness, swelling, pain and blisters associated.…

    • 910 Words
    • 4 Pages
    Better Essays
    Read More
  • Best Essays

    Report of the Roles Played by the Asx and Asic
    • 1666 Words
    • 7 Pages

    Report of the Roles Played by the Asx and Asic

    On 1 April1987, six exchanges that operated in the state capital cities merged to form the ASX. It is an Australia's primary national market for equities, derivatives, and securities. In Nov.1998, the ASX became the first exchange in the world to have its shares listed on its own market. On 1 August 2010, the responsibility for the supervision of real-time trading on the ASX was transferred to ASIC. The ASIC which is an independent commonwealth government body become the Australia’s corporate, market and financial service regulator. From then on, trading on the ASX is regulated and supervised mainly by ASIC and ASX. In this report, we are going to look in detail at the role played by the ASX and ASIC in the regulation and supervision of trading on the ASX. Moreover, a wide range of sources are used in this report. Some information are obtained from the textbook, official website of the ASX and ASIC, as well as several journal articles. Topics covered in this report are the importance of the ASX as a regulator, the responsibility and objective of the ASX and ASIC, roles played by the ASX and ASIC, and the supervision transferred.…

    • 1666 Words
    • 7 Pages
    Best Essays
    Read More
  • Powerful Essays

    Fins1612 Notes
    • 17846 Words
    • 72 Pages

    Fins1612 Notes

    Page 3: Introduction to the Financial System Page 7: Commercial Banks Page 12: The Share Market and the Corporation Page 15: Corporations Issuing Equity into the Share Market Page 19: Investors in the Share Market Page 24: Short-term Debt Page 28: Medium- to Long-term Debt Page 32: Interest Rate Determination and Forecasting Page 37: The Foreign Exchange Market Page 40: Factors that Influence the Exchange Rate Page 42: Futures Contracts and Forward Rate Agreements Page 47: Options…

    • 17846 Words
    • 72 Pages
    Powerful Essays
    Read More
  • Satisfactory Essays

    sasads
    • 17158 Words
    • 1 Page

    sasads

    TitleQuiz Chapter 1StartedNovember 16, 2013 812 PMSubmittedNovember 16, 2013 819 PMTime spentHYPERLINK javascriptopenNewWindow(viewAttemptEventsLog.dowebctassmtAttemptId331676404011,ViewAccessLog,500,500) o View Access Log in a new window000724 Total score8/10 80 Total score adjusted by 0.0 Maximum possible score 10 1.Which of the following statements about dealer markets is true Student Response Value Correct Answer Feedback A. Closed-end funds are sold exclusively through this market. B. Rights and warrants can be bought and sold through this market. C. The volume of trading is far greater than the equities market. 100 D. This market uses a system where buyers and sellers enter competitive bids and offers simultaneously. General Feedback Almost all bonds and debentures are sold through the dealer market. These dealer markets are less visible than the auction markets for equities so many people are surprised to learn that the volume of trading on the dealer market for debt securities is several times larger than the equity market. Text reference Chapter 1 The Capital Market. Score 1/1 2.The Canadian securities industry is made up of 3 key elements that make its functioning possible. What are these 3 components Student Response Value Correct Answer Feedback A. Banks, pension funds and investment dealers. B. Banks, trust companies and insurance companies. C. Financial products, financial markets and financial intermediaries. 100 D. Federal, provincial and municipal regulators. General Feedback The three key elements in the securities industry are financial products, financial markets and financial intermediaries. Text reference Chapter 1 The Capital Market. Score 1/1 3.The government of a developing country has just announced a new program to nationalize all oil companies operating within their borders. How are investors interested in investing in this country likely to react Student Response Value Correct Answer…

    • 17158 Words
    • 1 Page
    Satisfactory Essays
    Read More
  • Powerful Essays

    Res 320 Business Research Applications Paper
    • 1506 Words
    • 7 Pages

    Res 320 Business Research Applications Paper

    covering over 3,000 securities in more than 51 countries. We will be looking at their three main…

    • 1506 Words
    • 7 Pages
    Powerful Essays
    Read More
  • Powerful Essays

    cultural differences between India and Canada
    • 14886 Words
    • 60 Pages

    cultural differences between India and Canada

    Mr. Aggarwal is a promoter of the SMC Group.He has rich and extensive experience of more than 23 years. He is a fellow member of the Institute of Chartered Accountants of India…

    • 14886 Words
    • 60 Pages
    Powerful Essays
    Read More
  • Best Essays

    Dodd Frank Wall Street Reform Act Summary
    • 1485 Words
    • 6 Pages

    Dodd Frank Wall Street Reform Act Summary

    Given the condition of the global economy over the last few years, it is no surprise that political reform has played a major role in the structure of our financial system. Specifically, the Global Financial Crisis of 2008 (the “Crisis”), which resulted in the worst recession in the United States since the Great Depression of 1929, triggered the enactment of the Dodd-Frank Wall Street Reform Act (the “Act”) (Chan, 2011). The Act proposed changes to several areas of regulation, especially the trading of over-the-counter derivatives (OTC) (Amadeo, 2013).…

    • 1485 Words
    • 6 Pages
    Best Essays
    Read More
  • Good Essays

    Colonial America Vs New England
    • 77 Words
    • 1 Page

    Colonial America Vs New England

    Distinctly before the 18th century, two of the most advanced colonies, the Virginia Region and New England, were eager to progress forward and separate themselves from their home country by establishing a self democratic government. However,in the process, both colonies asserted differently in ways of contrasting religious views, environmental resources and educational difference. Therefore,these contrasting views and ideas are what motivated these colonies and can best be seen as what articulated and diverses them from one another.…

    • 77 Words
    • 1 Page
    Good Essays
    Read More
  • Powerful Essays

    Turtles
    • 9651 Words
    • 39 Pages

    Turtles

    EIGHT Further Study 32 Trading Psychology 32 Money Management 33 Trading Research 33 Final Warning 33 Foreword ORIGINAL TURTLES f Free Rules? Are you kidding?…

    • 9651 Words
    • 39 Pages
    Powerful Essays
    Read More
  • Satisfactory Essays

    cs date sheet
    • 344 Words
    • 6 Pages

    cs date sheet

    COMPANY SECRETARIES EXAMINATIONS, DECEMBER, 2014 TIME-TABLE & PROGRAMME EXAMINATION TIMING : 2.00 P.M. TO 5.00 P.M. Date and Day 22.12.2014 Monday Executive Programme (Old Syllabus) General and Commercial Laws (Module-I) Professional Programme (Old Syllabus) Company Secretarial Practice (Module – I) 23.12.2014 Tuesday Company Accounts, Cost Management Accounting (Module-I) Drafting, Appearances Pleadings (Module-I) 24.12.2014 Wednesday Tax Laws (Module-I) 25.12.2014 Thursday 26.12.2014 Friday 27.12.2014 Saturday 28.12.2014 Sunday 29.12.2014 Monday 30.12.2014 Tuesday 31.12.2014 Wednesday Executive Programme (New Syllabus)…

    • 344 Words
    • 6 Pages
    Satisfactory Essays
    Read More
  • Powerful Essays

    JPMorgan And The London Whale
    • 6437 Words
    • 23 Pages

    JPMorgan And The London Whale

    This document is authorized for use only by Yen Ting Chen in FInancial Markets and Institutions taught by Nawal Ahmed Boston University from September 2014 to December 2014.…

    • 6437 Words
    • 23 Pages
    Powerful Essays
    Read More
  • Powerful Essays

    Charles Schwab vs Merrill Lynch
    • 2189 Words
    • 9 Pages

    Charles Schwab vs Merrill Lynch

    Technological innovations and development of high speed internet in late 1980s created opportunity for many businesses playing in financial markets to change their strategy and find new ways of fighting against competition and apply competitive advantage tools in succeeding in their business. On the other side, investors benefited from this as well. Now, they had new ways of investing their capital and spare resources with little cost and more opportunities to invest. This led to the creation of Electronic Communication Networks (ECN) in financial markets, which caused dramatic impact on how financial markets operate and on how stocks are traded. As a result, firms with strong leadership and management took some risk, changed strategies in conducting part of their business and entered financial markets through the Internet. They started to provide online services. Now, small companies like Charles Schwab could easily compete with companies like Merrill Lynch, who was giant Investment Banking firm. In traditional financial markets Investment Bankers played the role of intermediary for firms and companies to issue stocks and bonds with the purpose of raising capital. The internet was going to destroy their business and push them out of the business. At the same time, these virtual financial markets created strong financial risks to those companies involved with online IPOs and they had an option to choose between traditional approach and online IPOs. This paper analyses how Charles Schwab was successful in putting Merrill Lynch business in danger by providing almost the same type of services online.…

    • 2189 Words
    • 9 Pages
    Powerful Essays
    Read More
  • Powerful Essays

    Analysis of Ipo Prospectus of Utfsl and Ecobank Ltd
    • 3730 Words
    • 15 Pages

    Analysis of Ipo Prospectus of Utfsl and Ecobank Ltd

    Investing in the stock market should not be a "heart and gut" affair based on hunches, guesswork, hot tips, rumours or speculation. This is true for investments in securities of companies already listed on the stock exchange; it is also true for investments in securities of companies seeking listing for the first time.…

    • 3730 Words
    • 15 Pages
    Powerful Essays
    Read More
  • Satisfactory Essays

    Finance for Effective Marketing
    • 5086 Words
    • 21 Pages

    Finance for Effective Marketing

    Investment Portfolio for RIX PLC Prepared By D.M.D.B. Thanayamwatta Reg No: D121T08-1 Finance for Effective Marketing (MGL203) Individual Assignment December 2012 Examination Post Graduate Diploma in Marketing SRI LANKA INSTITUTE OF MARKETING Contents 1 Executive Summary 2 2 Introduction 3 3 Investing in Stock Exchanged 4 3.1 Colombo Stock Exchange 5 3.2 Investing Portfolio 5 3.3 Important Points about Profitability Ratios, 5 3.4 Important Points about Investor Ratios, 6 4 ODEL PLC (ODEL.N0000) 6 4.1 Details 6 4.2 Summery 7 4.2.1 GPM 8 4.2.2 NPM 8 4.2.3 ROCE 8 4.2.4 NPAT: TA 8 4.2.5 EPS 8 4.2.6 DPS 8 4.2.7 DY 8 4.2.8 DC 9 4.2.9 Price: Earnings 9 5 Nestle Lanka PLC (NEST.N0000) 9 5.1 Details 9 5.2 Summery 10 5.2.1 GPM 11 5.2.2 NPM 11 5.2.3 ROCE 11 5.2.4 NPAT: TA 11 5.2.5 EPS 11 5.2.6 DPS 11 5.2.7 DY 11 5.2.8 DC 11 5.2.9 Price: Earnings 11 6 Richard Pieris &…

    • 5086 Words
    • 21 Pages
    Satisfactory Essays
    Read More
  • Powerful Essays

    Causes and Effects of Stronger and Weaker Peso in the Philippine Economy
    • 2113 Words
    • 9 Pages

    Causes and Effects of Stronger and Weaker Peso in the Philippine Economy

    he money and capital markets are at the economic centre of the industrial and commercial world. Both firms and individuals rely upon the efficient operation of these markets for obtaining capital for investment purposes or money to meet their short-term financial needs. Over the last fifty years the operation of the money and capital markets has been progressively ‘globalised’ both to finance international trade but also to support multinational business and governments finance their activities. This globalisation has been facilitated by a number of political, economic and technological developments. In this chapter, we explore the financial markets with an outline of their history and their development in modern globalised economies. We devote some time to the concept of a security as a negotiable claim and the phenomenon of securitisation. We outline the structure of the financial markets and, in particular, how the money and capital markets interact. We then turn to the equity market as the primary risk market and discuss the role of information in the pricing of securities and the concept of information efficiency. Although we take a bias towards market efficiency, some anomalous evidence will also be described. Risk and return are then defined and an intuitive appreciation given of the concept of diversification and risk partitioning. The risk–return trade-off is then discussed, leading to an informal discussion of the capital asset pricing model. Finally, topics in the fixed interest market are then discussed before closing with a section on the sources of long- and short-term finance.…

    • 2113 Words
    • 9 Pages
    Powerful Essays
    Read More

Related Topics