Capital Markets and Investment Banking Process Paper
Capital Markets and Investment Banking Process
Investment banks have assumed a major role in the economy by oblation a wide variety of important and valuable services. The majority of these services revolve around the capital markets, where companies raise supernumerary capital through the sale and purchase of securities. A various(a) group of securities, held for investment reasons, called an investment portfolio. There ar certain(prenominal) relationships between investment banking, capital markets, and investment portfolios.
The Investment Banking Process
Investment banks are different from commercial message banks in that while commercial banks are loan suppliers, investment banks have other roles to exploit in the economy. Two of the more important roles played by investment banks are facilitating the transfer of funds between the cosmos and corporations through the use of capital markets, and as a provider of information and advice, to corporations, regarding acquisitions, mergers, and similar financial transactions.
The activities of investment banks are performed in the capital, primary quill and secondary, markets. There are distinguishing features which separate the two markets.
The primary market, according to Bodie, Kane, & Marcus (2007), is A market in which new issues of securities are offered to the public. Activities in the primary market consist of investors purchasing securities as directly as possible to the source. Secondary markets are specify as a market in which Already living securities are traded among investors (Bodie, Kane, & Marcus, 2007, p. 18).. The secondary markets offer an option to investors looking at to exchange their assets, in the name of profit or liquidity, or to those looking to trade amongst other investors.
Investment banks are among the most dynamic participants in the primary market. This activity is because of their role as an...If you sine qua non to get a full essay, order it on our website: Orderessay
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