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4. Types of Stock Market Transactions Types of Market Organizations The Security Markets Security Market Efficiency and Returns > The Security Markets Free to share, print, make copies and changes. Get yours at www.boundless.com www.boundless.com/finance?campaign_content=book_192_section_83&campaign_term=Finance&utm_campaign=powerpoint&utm_medium=dir ect&utm_source=boundless

5. An initial public offering (IPO), or stock market launch, is a type of public offering where shares of stock in a company are sold to the general public, on a securities exchange, for the first time. A secondary market offering is a registered offering of a large block of a security that has been previously issued to the public. In the secondary market, securities are sold by and transferred from one investor or speculator to another. It is therefore important that the secondary market remain highly liquid. Private placement (or non-public offering) is a funding round of securities which are sold not through a public offering, but rather through a private offering, mostly to a small number of chosen investors. Stock repurchase (or share buyback) is the reacquisition by a company of its own stock. Types of Stock Market Transactions Free to share, print, make copies and changes. Get yours at www.boundless.com www.boundless.com/finance/textbooks/boundless-finance-textbook/security-market-efficiency-and-returns-9/the-security-markets-83/types-of- stock-market-transactions-357- 3793?campaign_content=book_192_section_83&campaign_term=Finance&utm_campaign=powerpoint&utm_medium=direct&utm_source=boundl ess Secondary market View on Boundless.com Security Market Efficiency and Returns > The Security Markets

6. The primary market is that part of the capital markets that deals with the issue of new securities. Over-the-counter (OTC) or off-exchange trading is to trade financial instruments such as stocks, bonds, commodities, or derivatives directly between two parties. The secondary market, also called aftermarket, is the financial market in which previously issued financial instruments such as stock, bonds, options, and futures are bought and sold. One type of market structure is the auction market, where buyers and sellers are brought together directly, announcing the prices at which they are willing to buy or sell securities. Broker markets are usually only used for securities that have no public market, necessitating the middleman in the form of a broker. The broker works for a client to find a suitable trading partner. Dealer markets, also called quote-driven markets, centers on market-makers (or dealers) who provide the service of continuously bidding for securities that investors want to sell and offering securities that investors want to buy. Types of Market Organizations Free to share, print, make copies and changes. Get yours at www.boundless.com www.boundless.com/finance/textbooks/boundless-finance-textbook/security-market-efficiency-and-returns-9/the-security-markets-83/types-of- market-organizations-358- 10936?campaign_content=book_192_section_83&campaign_term=Finance&utm_campaign=powerpoint&utm_medium=direct&utm_source=boun dless NASDAQ View on Boundless.com Security Market Efficiency and Returns > The Security Markets

7. Free to share, print, make copies and changes. Get yours at www.boundless.com Appendix

8. Key terms auction market an exchange where goods and services are offered up for bid, bids are taken, and then sold to the highest bidder dealer market an exchange where institutions are assigned to a particular security and trade out of their own account FINRA In the United States, the Financial Industry Regulatory Authority, Inc., or FINRA, is a private corporation that acts as a self-regulatory organization (SRO). FINRA is the successor to the National Association of Securities Dealers, Inc. (NASD). Though sometimes mistaken for a government agency, it is a non-governmental organization that performs financial regulation of member brokerage firms and exchange markets. The government organization which acts as the ultimate regulator of the securities industry, including FINRA, is the Securities and Exchange Commission. forwards A non-standardized contract between two parties to buy or sell an asset at a specified future time at a price agreed upon today. securities Synonymous with "financial instrument. " A tradable asset of any kind; either cash, evidence of an ownership interest in an entity, or a contractual right to receive or deliver cash or another financial instrument. swaps A swap is a derivative in which counterparties exchange cash flows of one party's financial instrument for those of the other party's financial instrument. underwriter An entity which markets newly issued securities Free to share, print, make copies and changes. Get yours at www.boundless.com Security Market Efficiency and Returns

9. Secondary market Secondary market shares should be highly liquid. Free to share, print, make copies and changes. Get yours at www.boundless.com Google. "Google Image Result for." CC BY http://www.google.com/imgres?q=stock+market&num=10&hl=en&biw=1275&bih=596&tbs=sur:fmc&tbm=isch&imgrefurl=http://investorcentric.blogs.nuwireinvestor. com/2009/06/greenspan-says-stock-market-recovery.html&tbnid=e5VME8g3jjFwgM&docid=DfYeKl4ecj8-_M&ved=0CE8QhRYoAQ&ei=WF- LUKGuIee20AGlgIGgDw&dur=3996 View on Boundless.comCC BY http://www.google.com/imgres?q=stock+market&num=10&hl=en&biw=1275&bih=596&tbs=sur:fmc&tbm=isch&imgrefurl=http://investorcentric.blogs.nuwireinvestor. com/2009/06/greenspan-says-stock-market-recovery.html&tbnid=e5VME8g3jjFwgM&docid=DfYeKl4ecj8-_M&ved=0CE8QhRYoAQ&ei=WF- LUKGuIee20AGlgIGgDw&dur=3996View on Boundless.com Security Market Efficiency and Returns

10. NASDAQ NASDAQ is a major example of a secondary quote-driven market. Free to share, print, make copies and changes. Get yours at www.boundless.com Wikipedia. "NASDAQ." GNU FDL http://en.wikipedia.org/wiki/NASDAQ View on Boundless.comGNU FDLhttp://en.wikipedia.org/wiki/NASDAQView on Boundless.com Security Market Efficiency and Returns

11. Free to share, print, make copies and changes. Get yours at www.boundless.com Security Market Efficiency and Returns Which of the following correctly defines a type of stock market transaction? A) A private placement is an offering of a block of a security that has been previously issued to the public. B) A secondary market offering is a funding round of securities which are not sold through a public offering. C) All of these answers. D) A stock repurchase is the reacquisition by a company of its own stock.

12. Free to share, print, make copies and changes. Get yours at www.boundless.comwww.boundless.com Boundless - LO. "Boundless." CC BY-SA 3.0 http://www.boundless.com/CC BY-SA 3.0http://www.boundless.com/ Security Market Efficiency and Returns Which of the following correctly defines a type of stock market transaction? A) A private placement is an offering of a block of a security that has been previously issued to the public. B) A secondary market offering is a funding round of securities which are not sold through a public offering. C) All of these answers. D) A stock repurchase is the reacquisition by a company of its own stock.

13. Free to share, print, make copies and changes. Get yours at www.boundless.com Security Market Efficiency and Returns Which of the following correctly defines a type of market organization? A) A dealer market is used for securities that have no public market. B) A broker market centers on market-makers who provide the service of continuously bidding for securities. C) All of these answers. D) An auction market allows buyers and sellers to negotiate the securities' prices between themselves.

14. Free to share, print, make copies and changes. Get yours at www.boundless.comwww.boundless.com Boundless - LO. "Boundless." CC BY-SA 3.0 http://www.boundless.com/CC BY-SA 3.0http://www.boundless.com/ Security Market Efficiency and Returns Which of the following correctly defines a type of market organization? A) A dealer market is used for securities that have no public market. B) A broker market centers on market-makers who provide the service of continuously bidding for securities. C) All of these answers. D) An auction market allows buyers and sellers to negotiate the securities' prices between themselves.

15. Attribution Wikipedia. "Secondary market offering." CC BY-SA 3.0 http://en.wikipedia.org/wiki/Secondary_market_offeringCC BY-SA 3.0http://en.wikipedia.org/wiki/Secondary_market_offering Wikipedia. "IPOs." CC BY-SA 3.0 http://en.wikipedia.org/wiki/IPOsCC BY-SA 3.0http://en.wikipedia.org/wiki/IPOs Wikipedia. "Secondary market." CC BY-SA 3.0 http://en.wikipedia.org/wiki/Secondary_marketCC BY-SA 3.0http://en.wikipedia.org/wiki/Secondary_market Wikipedia. "Stock repurchase." CC BY-SA 3.0 http://en.wikipedia.org/wiki/Stock_repurchaseCC BY-SA 3.0http://en.wikipedia.org/wiki/Stock_repurchase Wikipedia. "Private placement." CC BY-SA 3.0 http://en.wikipedia.org/wiki/Private_placementCC BY-SA 3.0http://en.wikipedia.org/wiki/Private_placement Wiktionary. "underwriter." CC BY-SA 3.0 http://en.wiktionary.org/wiki/underwriterCC BY-SA 3.0http://en.wiktionary.org/wiki/underwriter Wikipedia. "FINRA." CC BY-SA 3.0 http://en.wikipedia.org/wiki/FINRACC BY-SA 3.0http://en.wikipedia.org/wiki/FINRA Wikipedia. "Broker-dealer." CC BY-SA 3.0 http://en.wikipedia.org/wiki/Broker-dealerCC BY-SA 3.0http://en.wikipedia.org/wiki/Broker-dealer Wikipedia. "Auction." CC BY-SA 3.0 http://en.wikipedia.org/wiki/AuctionCC BY-SA 3.0http://en.wikipedia.org/wiki/Auction Wikipedia. "securities." CC BY-SA 3.0 http://en.wikipedia.org/wiki/securitiesCC BY-SA 3.0http://en.wikipedia.org/wiki/securities Wikipedia. "forwards." CC BY-SA 3.0 http://en.wikipedia.org/wiki/forwardsCC BY-SA 3.0http://en.wikipedia.org/wiki/forwards Wikipedia. "swaps." CC BY-SA 3.0 http://en.wikipedia.org/wiki/swapsCC BY-SA 3.0http://en.wikipedia.org/wiki/swaps Wikipedia. "Market maker." CC BY-SA 3.0 http://en.wikipedia.org/wiki/Market_makerCC BY-SA 3.0http://en.wikipedia.org/wiki/Market_maker Wikipedia. "NYSE." CC BY-SA 3.0 http://en.wikipedia.org/wiki/NYSE#TradingCC BY-SA 3.0http://en.wikipedia.org/wiki/NYSE#Trading Wikipedia. "Securities market." CC BY-SA 3.0 http://en.wikipedia.org/wiki/Securities_marketCC BY-SA 3.0http://en.wikipedia.org/wiki/Securities_market Free to share, print, make copies and changes. Get yours at www.boundless.com Security Market Efficiency and Returns