ofSecuritiesMarkets资产定价上海交大蔡明超.ppt

stock to the public for the first time
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Introduction of Rule 415
• Allows firms to register securities and sell them piecemeal over the next two years
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LOS d: Distinguish between primary and secondary capital markets and explain how secondary support primary.
• Primary capital markets relate to the sale of new issues of bonds and securities by government units, municipalities, or firms to obtain new capital.
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Corporate Bond and Stock Issues
New issues are divided into two groups 1. Seasoned new issues - new shares offered by firms that
already have stock outstanding 2. Initial public offerings (IPOs) - a firm selling its common
• g) compare and contrast major characteristics of exchange markets, including
• exchange membership, types of orders, and market makers; • h) process of selling a stock short and discuss an investor’s
• Small purchasers can submit noncompetitive bids where they are guaranteed securities at the average of the accepted competitive bids.
• Government securities include: bills 1 to 12 months; notes 2 to 10 years, and bonds 10 years and up.
motivation for short; • i) discuss the technical points affecting short sales; • j) describe the process of buying a stock on margin; • k) compute the rate of return on a margin transaction; • l) define maintenance margin and determine the stock price of
• b) competitive bids, negotiated sales, and private placements for issuing bonds;
• c) compare and contrast the secondary markets for U.S. government/municipal bonds
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Service provided by underwriter
• Underwriters sell the bonds to investors – Origination – Risk-bearing – Distribution
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The Underwriting Function
• The investment banker purchases the entire issue from the issuer and resells the security to the investing public.
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LOS b: Distinguish between competitive bids, negotiated sales, and private placements for issuing bonds
• Municipal bond issues are brought to market by a local government unit through: – Competitive bidding with the underwriter. This means the underwriter will help originate the issue, bear the price risk, and sell the securities for a competitively determined fee. – A negotiated underwriting. Here the underwriter helps originate the issue, bear the price risk, and distribute the issue for a negotiated fee. – A private placement where the governmental unit sells the issue directly to the investor without the help of an underwriter.
Lec 4
Organization and Functioning of Securities Markets
饭吃8分，获利8成
Chapter 4
Organization and Functioning of Securities Markets
• a) describe the characteristics of a well-functioning securities market;
• with the secondary markets for corporate bonds; • d) primary and secondary capital markets, explain how
secondary support primary , • e) distinguish between call and continuous markets; • f) compare and contrast the structural differences among
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LOS c: the secondary markets for U.S. government/municpal bonds with the
corporate bonds.
• secondary market for treasuries is through the 35 major treasury dealers. Agency securities and municipal bonds are traded through the major banks and investment firms.
• Referred to as shelf registrations • Great flexibility • Reduces registration fees and expenses • Allows requesting competitive bids from several
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LOS b: Distinguish between competitive bids, negotiated sales, and private placements for issuing bonds
• Government bond issues are sold at public auction by the Federal Reserve.
a margin call; • m) discuss major effects of the institutionalization of securities
markets.
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LOS a: Describe the characteristics of a well-functioning securities market.
4. Informational or external efficiency, which means prices rapidly adjust to new information so that the prevailing market price reflects all available information regarding the asset.
• Secondary financial markets are where securities trade after their initial offering. Secondary markets are important because they give investors liquidity. Liquidity enables investors to sell quickly. The greater the liquidity securities have, the more willing investors are to buy securities. Liquid secvestors with continuous information about the market price of their securities. The better the secondary market, the easier it is for firms to raise external capital.