Capital Market Essay

Introduction to the Financial System Financial Instruments Financial instruments can be: • Equity This is usually through the selling of common shares and/or common stock. It gives the buyer some ownership of the firm and thus, voting power when it comes to electing the board of directors. Debt This is money that is borrowed from someone else. Debt must be repaid at set intervals. Debt can be divided into short and long-term debt. This should follow the matching principle where short-term assets should be funded with short-term debt.

When an investor purchases stock, they become a shareholder which means they have ownership of “part" of the company. If the company 's profits rise, you are entitled to share in those profits. This also works the other way around. Should an investor sell their stock when the current price is lower than what they paid for it, then they would make a loss.

Item 5.|  |MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES|  | |20|  |

Financial markets reference a platform that allows the exchange of monetary assets with securities or other entities solely, in corporate groups and also through government based groups. The financial markets mainly facilitate the transfer at low prices for the buyer but at a sufficient level for the seller, if the requests and source match (Jones 2002). Stocks are a core market in the United States and have been highly recognized for an extensive period based on the revenue they generate for the economy. The global economy caters for the buying, selling and holding of stocks by the investor and also allows for the placement of a monitoring and party capable of performing the stated transactions on behalf of the investor (Darškuvienė

According to Alfaro, Chanda, Kalemli-Ozcan, & Sayek (2004) stock markets play a vital role as they allow investors to buy and sell shares in publicly traded companies. They are one of the most vital areas of a market economy as they provide companies with access to capital and investors with a slice of ownership in the company and the potential of gains based on the company 's future performance.

2. The NYSE is defined as a “spot” market purely and simply because it has a physical location. The NASDAQ, on the other hand, is not a spot market because it has no one central location.

A stock market is where you buy and sell stock. The New York stock exchange is an example.

A secondary market is a financial market in which securities that have been previously issued can be resold. An investment bank assists in the initial sale of securities in the primary market by underwriting the securities: it guarantees a price for a corporation’s securities and then sells them to the public. A corporation acquires new funds only when its securities are first sold in the primary market.

Question: Financial markets in which equity and debt instruments with maturities greater than one year are traded are called

Moving on to the next process the secondary market. The secondary market is the market for buying and selling mortgages.

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.

For the month of December, I was given an assignment consisting of $100,000 and four stocks to invest in. My four stocks were The Ralph Lauren Corp., Visa Inc., Master card Inc. and The Chevron Corp. As stated I was given a month to record my data and I ended up with a total capital gain of $5,518.36 for the one month period for my investments. I have to thank you Mr. Acker, this project was not difficult, but it did confuse me. Receiving this assignment scared me in a way, because I didn’t know what I was getting into. The finance world is scary and tricky, one minute the market is doing good and other days it would be low. While calculating my capital gains or losses I thought I would lose a larger

Stock Market is basically a stock exchange. An example of a stock market is the NASDAQ founded in 1971.

Some of these securities include debt securities, equity securities, common stock, and preferred stock. Lastly, financial markets provide the money needed by individuals and companies and establish the link between corporations and investors according to (Titman, Keown, & Martin, 2011).

The NASDAQ constitutes its market type in a deal form for securities market, dealers sell stocks directly to firms or investors through the telephone or the internet, In the same way the NYSE constitutes an auction