文档介绍：Chapter Twenty-One
Understanding Securities Markets and Investments
Traditional Investment Vehicles
Securities – certificates of
part ownership of a firm
Bought and sold through an
account executive or stockbroker
The primary market
investor purchases financial securities directly from the
issuer of those securities
IPO
How Securities Are Bought and Sold
The secondary market
Investor purchases securities from other investors
Securities exchange
financial securities traded between investors
New York Stock Exchange (NYSE), American Stock Exchange
Over-the-counter (OTC) market
buy and sell stock not listed on a securities exchange
Nasdaq—system through which most OTC stocks are traded
Flow of Securities in Secondary Markets
Criteria for Being Listed on the NYSE
Annual earnings = M last tax year
Publicly held stock = M shares
Value of Publicly held stock=100M
# of stockholders with 100 shares=2000
The mechanics of a transaction
Market order
a security purchased or sold at the current market price
Limit order
a security bought or sold at a price that is equal to or better than some specified price
Discretionary order
broker decides when to execute the transaction and at what price
So what keeps an honest broker honest?
Regulation of Securities Trading
State regulation
States require registration of stock issues and licensing of brokers and securities dealers
Federal regulation
Securities Act of 1933 (Truth in Securities Act)
Requires registration statement & prospectus describing a new security be fully disclosed
Sarbanes-Oxley Act - 2002
Protects the validity of financial info in the registration statement-also, can’t alter or pany files
Securities and mission (SEC)
enforces federal securities regulations
How Do Securities Earn You e?
Securities (common and preferred stock) offer dividend e, but firm is not required to pay this
If they do …
Dividend—cash payments to stockholders
Stock dividend—payment as additional stock
Other