ECON 2035 Chapter : Chapter 5
Document Summary
Test will be until the section on derivatives: securities markets, made of individuals and securities firms, security firms companies that hold, trade, and help others trade securities. Mutual funds & hedge funds similarities they buy shares of securities and sell them: brokers and dealers: a broker buys and sells securities on the behalf of someone else. Brokers & dealers similarities: they"re both licensed to buy and sell securities. Brokers work for others, dealers deal for themselves: investment banks: a bank that doesn"t accept deposits. Automatic quotation (nasdaq: ecn"s (electronic communications networks) making dealers go extinct within the bond network. The company has to pay taxes on those payments. However, if they issue bonds, the payments can be. Deducted from taxes: thus meaning its cheaper to issue bonds than stocks, cost-certainty: if they issue bonds they know exactly how much they need to pay back and when. 6%probability of either happening is : s = the % of wealth in stocks.
