FIN 3300 Chapter Notes - Chapter 3: Initial Public Offering, Primary Market, Private Placement
Document Summary
Ch 3 how securities are traded (essentials of investments) Primary market: sale of securities for newly issued securities. Secondary market: sale of securities for trades in existing securities (nyse) Privately held firms: up to 499 shareholders, sell shares to small number of investors in a private placement. Publicly traded companies: ipo (initial public offering): 1st time issued of shares to general public. Public offerings of stocks and bonds are marketed by investment bankers. Markets: (underwriters: direct search market: buyers/sellers must seek each other out directly (least organized, brokered markets: brokers find it profitable to offer search services to buyers/sellers. Ex: real estate market (primary market seek investors: dealer markets: trading activity in a particular type of asset, purchase assets for their own accounts and later sell them for a profit from inventory. Ex: bonds in otc dealer markets: auction markets: all traders converge at one place to buy or sell an asset.
