Textbook Notes (363,019)
Canada (158,147)
MGTA02H3 (361)
Chapter 11

Chapter 11

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University of Toronto Scarborough
Management (MGT)
Chris Bovaird

Chapter 11 Understanding Shares and Other Investments SECURITIES MARKETS Securities are stocks and bonds (which represent a secured-asset-based claim on the part of investors) that can be bought and sold. Holders of stocks and bonds have a stake in the business that issued them. Stockholders have claims on some of a corporations assets because each share represents part ownership. Companies sell bonds to raise long-term funds. The markets in which stocks and bonds are sold are called securities markets. Primary and Secondary Markets for Securities Primary securities market is the sale and purchase of newly issued stocks and bonds by firms or governments. New securities are sometimes sold to one buyer or a small group of buyers. Investment Banking Investment banker is any financial institution engaged in purchasing and reselling new stocks and bonds. Investment bankers such as RBC Dominion Securities and TD Securities provide three type of investment banking services: o They advise the company on the timing and financial terms for the new issue. o By underwriting the new securities, investment bankers bear some of the risk of issuing the new security. o They create the distribution network that moves the new securities through groups of other banks and brokers into the hands of individual investors. Secondary securities market is the sale and purchase of previously issued stocks and bonds. www.notesolution.com
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