Respond in 150 words
According to Brealey, Myers, and Marcus (2020), a financial market is a market where securities are issued and traded. This type of market is not the same as a physical market but refers to securities and bonds. There are two distinct types of market namely primary and secondary markets. Securities are created and issued in the primary market while the trading of existing securities are traded by Investors in the secondary market. New stocks and bonds are initially sold to the public for the first time in the primary market. The secondary market on the other hand is referred to as the stock market and involves trading between investors on all major indicators.
The primary market promotes capital growth by promoting individual conversion of savings to investments. Additionally, it facilitates the issue of bond by companies. Companies gain when shares are issued in the primary market. They can raise capital by selling financial assets. It also gives them access to potential investors. Financial markets help channel savings to corporate investment, and they help match up borrowers and lenders (Brealey, Myers, & Marcus, 2020, P.52).
Brealey, R., Myers, S. C., Marcus, A. J. (2020). Fundamentals of corporate finance (10th ed). McGraw-Hill Education: New York, NY.
Respond in 150 words
I found primary and secondary market very interesting. Primary market interact with the company and investor. Investor buy securities that was trade before . It would be like the very first time the securities are issues out by the company to the investor. Company receive the money and the investor receive new security certificate. Secondary markets where they have someone to buy and sell stocks to other investors that they already owns. Like a stock broker. It basic like reselling their own securities.
Another thing that I found interesting that when the stock rises the invest compare to them falling. The main purpose in why company raise the capital that they need to pay of their debts among many other reason. This also give the company an opportunity to help the economy. It have it advantage and the disadvantage . It can ether help the economy or if crash it hurt the economy and business. If it drop to low they can loss their investment which is bad. But at the same time that they can
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