Explore BrainMass

Indirect Market Transaction and Market Elements

This content was STOLEN from BrainMass.com - View the original, and get the already-completed solution here!

1. Give your own example of an Indirect Market Transaction. Include the company or entity, Intermediary, and purchaser/investor. What was the purpose of the transaction? What were the funds used for?

2. What is meant by the marketability of a security and the liquidity of a security? Give your own example.

3. What is meant by current assets and liabilities? What do these represent to the firm? What are some components of each?

4. What is residual cash flow? Give an example of real world residual cash flow either from your personal or professional experience.

Please include references.

© BrainMass Inc. brainmass.com October 25, 2018, 9:49 am ad1c9bdddf

Solution Preview

1. My example of an indirect market transaction is the underwriting of shares by financial institutions. The entity is the company that is raising share capital, the intermediary is the financial institution, and the purchaser/investor is the final buyer of shares and securities. The purpose of the transactions is to help the company raise capital from the share markets. The funds are used by the company for its projects, capital investment, or working capital. The financial institution engages to buy all the unsold shares in the issue of new securities.
2. Marketability of a security means the ability to trade a security at a given price in given volumes. Marketability relates ...

Solution Summary

The solution of 460 words explains indirect market transaction, marketability of security and liquidity of security, current assets and liabilities, and residual cash flow. References used are included.

See Also This Related BrainMass Solution

International Financial Management

For your job as the business reporter for a local newspaper, you are given the assignment of putting together a series of articles on the multinational finance and the international currency markets for your readers. Much recent local press coverage has been given to losses in the foreign exchange markets by JGAR, a local firm that is the subsidiary of Daedlufetarg, a large German manufacturing firm. Your editor would like you to address several specific questions dealing with multinational finance. Prepare a response to the following memorandum from
your editor:

TO: Business Reporter
FROM: Perry White, Editor, Daily Planet
RE: Upcoming Series on Multinational Finance
In your upcoming series on multinational finance, I would like to make sure you cover several
specific points. In addition, before you begin this assignment, I want to make sure we are all
reading from the same script, as accuracy has always been the cornerstone of the Daily Planet. I'd
like a response to the following questions before we proceed:

1. What new problems and factors are encountered in international as opposed to domestic financial management?

2. What does the term arbitrage profits mean?

3. What can a firm do to reduce exchange risk?

4. What are the differences between a forward contract, a futures contract, and options?

View Full Posting Details