Which of the following entities can issue securities to raise capital in the securities markets?

The NASDAQ requires direct negotiation for electronic execution of trades at quoted prices. TRUE: • The NASDAQ was originally organized to be more of a price quotation system, than a trading system. • NASDAQ was introduced in 1971 to link brokers and dealers in a computer network. • Prior to the introduction of the NASDAQ, all of the over-the-counter quotations were recorded manually and published daily on so-called pink sheets. Due to increased global demand, there are more limits on the securities that can be traded around the world. TRUE • Due to the impact of electronic trading, securities markets have come under increasing pressure to make international alliances or mergers. • It has become very important for exchanges to provide the cheapest and most efficient mechanism by which trades can be executed and cleared. • Companies need the ability to go beyond national borders when they wish to raise capital. The short-seller anticipates the stock price will go up, and the shares will be purchased later at a lower price than it initially sold for. TRUE • A short sale allows investors to profit from a decline in a security's price. • Short-sellers must not only replace the shares but also pay the lender of the security any dividends paid during the short sale. • With a short sale, the order is reversed. First, you sell and then you buy the shares. You begin and end with no shares. The marriage of electronic trading mechanisms with computer technology has had far-ranging im...

• Securities are fungible and tradable financial instruments used to raise capital in public and private markets. • There are primarily three types of securities: equity—which provides ownership rights to holders; debt—essentially loans repaid with periodic payments; and hybrids—which combine aspects of debt and equity. • Public sales of securities are regulated by the SEC. • Self-regulatory organizations such as NASD, NFA, and FINRA also play an important role in regulating derivative securities. Although the term "securities" is commonly associated with stocks, bonds, and similar instruments, the U.S. Supreme Court gives the term a much broader interpretation. In the case of Howey vs. SEC (1946), the court found that the plaintiff's sale of land and agricultural services constituted an "investment contract"—even though there was no trace of a stock or bond. Although the preferred stock is technically classified as equity security, it is often treated as debt security because it "behaves like a bond." Preferred shares offer a fixed dividend rate and are a popular instrument for income-seeking investors. It is essentially fixed-income security. Derivative Securities A derivative is a type of financial contract whose price is determined by the value of some underlying asset, such as a stock, bond, or commodity. Among the most commonly traded derivatives are Investing in Securities The entity that creates the securities for sale is known as the issuer, and those who buy them...

Updated March 31, 2023 What are Capital Markets? Capital markets are the exchange system platform that transfers capital from investors who want to employ their excess capital to businesses that require the capital to finance various projects or investments. Types of Capital Markets Capital markets primarily feature two types of securities – equity securities and debt securities. Both are forms of investments that provide investors with different returns and risks and provide users with capital with different obligations. 1. Equity Securities Equity securities are traded on the stock market and are essentially ownership shares of a business or venture. When you own equity securities of a company, you essentially own a portion of that company and are entitled to any future earnings that the company brings in. However, the money that you invest in equity securities is not required to be paid back by the business. 2. Debt Securities Debt securities are traded on the bond market and are IOUs that can come in the form of bonds or notes. They essentially represent the borrowing of money that will be paid back at a later date with interest. Interest is the required compensation that entices lenders to lend their money. The borrowers will take the money today, use it to finance their operations, and pay back the money in addition to a prescribed The securities can be bought and sold on two types of markets: • The primary market is when a company directly issues the securities in e...

In a primary market, companies, governments, or public sector institutions can raise funds through IPOs are not the only way new securities are issued. Publicly traded companies can issue new shares in what is called a primary issue of debt or stock, which involves the issue by a corporation of its own debt or new stock directly to buyers like Since the securities are issued directly by the company to its buyers, the company receives the money and issues new security certificates to the buyers. The primary market plays the crucial function of facilitating capital formation within the economy. The securities issued at the primary market can be issued in face value, premium value, or at Primary markets create long-term instruments through which corporate entities raise funds from the capital market. Once issued, the securities typically trade thereafter on a Raising funds [ ] Corporate entities raise funds from the primary market in three ways: • Public issue: a stock exchange lists the securities, and the corporation raises funds through initial public offering (IPO). • Rights issue: existing shareholders are offered more shares at a discounted price and on a pro rata basis. • Preferential allotment: a corporation issues shares at a price which may or may not be related to the current market price of the same security. See also [ ] • • • References [ ]