FINS1612 Chapter 4: Viney8e_IRM_ch04
Document Summary
Learning objective 4. 2: consider the origins and purpose of a stock exchange. 2 trading and settlement platforms: secondary market transactions do not raise additional equity for the original issuing corporation they are a transfer of ownership for value, market liquidity is the ratio of turnover to market capitalisation. A deep and liquid market encourages investors: market capitalisation is the number of issued shares multiplied by the share price. These standardised products are known as exchange traded contracts: exchange traded funds (etf) usually invest in a basket of securities listed on the local or international exchanges, foreign currencies or commodities. Etfs provide access to a diversified portfolio of securities: a contract for difference (cfd) is an agreement to exchange the net difference in value between the start date and the close date of a cfd. The cfd is based on a specified security. Assets generate rental income and (hopefully) capital gains.
