Professional Documents
Culture Documents
saver
Movement of Savings
Direct Transfer of Funds
firm
saver
Movement of Savings
Direct Transfer of Funds
cash
firm
saver
Movement of Savings
Direct Transfer of Funds
cash
firm
saver
securities
Movement of Savings
Indirect Transfer using Investment Banker
Movement of Savings
Indirect Transfer using Investment Banker
investment
banker
Movement of Savings
Indirect Transfer using Investment Banker
investment
banker firm
Movement of Savings
Indirect Transfer using Investment Banker
funds
investment
banker firm
Movement of Savings
Indirect Transfer using Investment Banker
funds
investment
banker firm
securities
Movement of Savings
Indirect Transfer using Investment Banker
funds
saver
investment
banker firm
securities
Movement of Savings
Indirect Transfer using Investment Banker
funds funds
saver
investment
banker firm
securities
Movement of Savings
Indirect Transfer using Investment Banker
funds funds
saver
investment
banker firm
securities securities
Movement of Savings
Indirect Transfer using a Financial Intermediary
Movement of Savings
Indirect Transfer using a Financial Intermediary
financial
intermediary
Movement of Savings
Indirect Transfer using a Financial Intermediary
financial
intermediary firm
Movement of Savings
Indirect Transfer using a Financial Intermediary
funds
financial
intermediary firm
Movement of Savings
Indirect Transfer using a Financial Intermediary
funds
financial
intermediary firm
firm
securities
Movement of Savings
Indirect Transfer using a Financial Intermediary
funds
saver financial
intermediary firm
firm
securities
Movement of Savings
Indirect Transfer using a Financial Intermediary
funds funds
saver financial
intermediary firm
firm
securities
Movement of Savings
Indirect Transfer using a Financial Intermediary
funds funds
saver financial
intermediary firm
intermediary firm
securities securities
Financial Market Components
Public Offering
Financial Market Components
Public Offering
Firm issues securities, which are
made available to both individual
and institutional investors.
Financial Market Components
Public Offering
Firm issues securities, which are
made available to both individual
and institutional investors.
Private Placement
Financial Market Components
Public Offering
Firm issues securities, which are made
available to both individual and
institutional investors.
Private Placement
Securities are offered and sold to a
limited number of investors.
Financial Market Components
Primary Market
Financial Market Components
Primary Market
Market in which new issues of a
security are sold to initial buyers.
Financial Market Components
Primary Market
Market in which new issues of a
security are sold to initial buyers.
Secondary Market
Financial Market Components
Primary Market
Market in which new issues of a
security are sold to initial buyers.
Secondary Market
Market in which previously issued
securities are traded.
Financial Market Components
Money Market
Financial Market Components
Money Market
Market for short-term debt
instruments (maturity periods of
one year or less).
Financial Market Components
Money Market
Market for short-term debt
instruments (maturity periods of
one year or less).
Capital Market
Financial Market Components
Money Market
Market for short-term debt
instruments (maturity periods of one
year or less).
Capital Market
Market for long-term securities
(maturity greater than one year).
Financial Market Components
Organized Exchanges
Financial Market Components
Organized Exchanges
Buyers and sellers meet in one central
location to conduct trades.
Financial Market Components
Organized Exchanges
Buyers and sellers meet in one central
location to conduct trades.
Over-the-Counter (OTC)
Financial Market Components
Organized Exchanges
Buyers and sellers meet in one central
location to conduct trades.
Over-the-Counter (OTC)
Securities dealers operate at many
different locations across the country.
Financial Market Components
Organized Exchanges
Buyers and sellers meet in one central
location to conduct trades.
Over-the-Counter (OTC)
Securities dealers operate at many
different locations across the country.
Connected by Nasdaq system (National
Association of Securities Dealers
Automated Quotation system).
Investment Banking
Direct Sale
Distribution Methods
Direct Sale
Issuing firm sells the securities directly
to the investing public.
Distribution Methods
Direct Sale
Issuing firm sells the securities directly
to the investing public.
No investment banker is involved.
Stock Issue Example:
Our firm needs to raise approximately
$100 million for expansion. Our stock
price is $20. We Select Merrill Lynch to
underwrite the issue for a 2%
underwriting spread.