Essay about Business Discussion 10

876 WordsOct 27, 20144 Pages
1. Regulations (Chapter 10) How have recent financial disruptions changed the ways that financial markets are regulated? The subprime mortgage crisis is a huge example of a financial disruption that changed the ways that financial markets are regulated. Since bankers were giving out subprime mortgages that the house buyers could not repay, the house buyers all obtained way too much debt that they could not pay back. Because people couldn’t pay back their debts then they got foreclosed. Since this screwed up our entire economic status there have been a lot of regulations on that market. 2. Bonds (Chapter 10) Describe the basic features and characteristics of bonds. What is a convertible bond and why do investors find such bonds…show more content…
The secondary market dictates what the value of a firm is. If there is a lot of trading going on for a certain firm’s securities then the value of the firm will go up. But if everyone sells the securities in a firm then the firm will lose a lot of money and value. 4. Stockbrokers (Chapter 10) What service does a stockbroker offer? Briefly describe the difference between a full service broker and a discount broker. How does a broker handle a market order? How does a broker handle a limit order? · A stockbroker is a regulated professional individual, usually associated with a brokerage firm or broker-dealer, who buys and sells stocks and other securities for both retail and institutional clients, through a stock exchange or over the counter, in return for a fee or commission. · Full service: provide a variety of services, such as personal advice, retirement planning and tax tips. Full-service brokers offer a wider selection of investment products such as derivatives and insurance, as well as access to the company's research. Full service brokers are paid based on commission. · Discount: do not provide investment advice. Fees are kept low because discount brokers offer fewer products. They are paid on salary, not commission. · Market order: An order that an investor makes through a broker or brokerage service to buy or sell an investment immediately at the best available current price. A market order is the default

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