Market Participants and Structures: Issuers, Securities, Brokers, and Investors, Exams of Business Economics

Download Market Participants and Structures: Issuers, Securities, Brokers, and Investors and more Exams Business Economics in PDF only on Docsity! SIE- Chapter 1: Overview of Market Participants and Market Structure What's an Issuer? Provide examples - Legal entity that sells securities in order to finance operations - The U.S Treasury and various U.S Govs - Foreign Govs - State Govs - Corporations and Banks Two methods that issuers use to raise capital? - Issuing debt securities (bonds) Issuing equity securities (stocks) What are debt securities? - Bonds- publicly traded loans. The creditor (investor) is lending the funds to the issuer who will pay back at maturity. What are equity securities? - Stock- If an investor purchases the stock they have an ownership interest. What is a broker? - Defined as any person that engages in the business of buying and selling securities for the account of others. They match up buyers and sellers and charge a commission. (Real-estate agent) What is a dealer? - Defined as any person that engages in the business of buying and selling securities for its own account. Principle transactions in which they buy securities and hold them in inventory. (Car dealer) Investment Bankers - IB works directly with the issuers to arrange and structure their securities offerings. How to raise funds during IPO, bonds. Referred to underwriters. May help to merge or acquire another company or restructure bankruptcy. - Underwritters Research - Study both the markets and individual issuers in order to issue recommendations. Either to buy, sell or hold. Sales - Referred to as Registered Representatives (RR's) or Investment advisor representatives (IAR's). They market individual stocks or groups of stocks like mutual funds. Trading - Trading professionals handle the execution of trades for both the firm's clients and the firm's own account. Operations - This area ensures all of the paperwork, funds, and securities transfers are handled efficiently and according to industry standards. Market Maker - When a broker-delaer chooses to display quotes into a trading system to indicate readiness to buy and sell securities at a specific price. Bid price - Price at which the firm will buy Ask price -