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EQUITY MARKETS (Market Participants (Clearing Agencies, Credit Rating…
EQUITY MARKETS
Market Participants
Clearing Agencies
Credit Rating Agencies
Broker-Dealers
Electronic Communication Networks
Investment Communications Networks
Investment Advisers
Securities Exchanges
Self-Regulatory Organixations (SROs)
Transfer Agents
Strutures of Equity Markets
Organized Exchange
Trading Floor
Floor Broker
Specialist
Listing Requirements
Over-the-Counter Markets
OTC Bulletin Board
Pink Sheet
Listing Requirements
Telecommunication networks
Specify bid and ask
Sencondary Markets
Three major stock markets
NYSE Euronext
NASDAQ
AMEX
Role
Provides liquidity to security purchases
Provides continuos pricing mechanism
Primary Markets
IPO
Definition
First Public Sale
Requires SEC approval
Three Choices to
Market Securities
Public Offering
Rights Offering
Private Placement
Overview of Equity Markets
Public Equity
Joint Stock Company
Advantages
Large Financial Resources
Limited Liability
Professional management
Large-scale production
Contribution to societ
Research and Development
Disadvantages
Double Tax
Conflict of interest
Agency problem
Neglect of minority
Private Equity
Other Concepts
Short Sales of Stock
General Market Conditions
Bull Market
Bear Market
Chicken Market
Pig Market
Reading a Stock Table
Ticker symbol
Price
Open
Close
Net change
Day's Range
52- Week High Low
Trading Volume
Market Capitalization
Dividend per share
Price/Earning Ratio
Stock Market Indexes
Role
Monitor the behavior of
a group of stocks
Benchmarks to evaluate performance
of professional money managers
Create and monitor an index fund
Measure
Predict future market
Indexes
DJIA
S&P 500 Composite Index
Nikkei 225 Average
Main Types of Oders
Limit Orders
Specific The buy and sell prove
Fill or Kill
Market Orders
Buy or sell at the best current price
Stock
Types
Common Stock
Fundamental ownership Claim
Dividends
Limited Liability
Voting rights
Preferred Stock
Cumulative Provision
Dividends
Convertible Preferred Stock
Equity Markets