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    Raising Capital in the Financial Markets

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    I have been reading Chapter 14: Raising Capital in the Financial Markets.

    14-1. What are financial markets? What function do they perform? How would an economy be worse off without them?

    14-2. Define in a technical sense what we mean by financial intermediary. Give an example of your definition.

    14-3. Distinguish between the money and capital markets.

    14-4. What major benefits do corporations and investors enjoy because of the existence of organized security exchanges?

    14-7. What is an investment banker, and what major functions does he or she perform?

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    14-1. What are financial markets? What function do they perform? How would an economy be worse off without them?
    Financial markets constitute a mechanism of bringing together buyers and sellers of financial instruments. The function performed by financial markets is to bring together the buyers and sellers at low cost of entering into transactions. The prices in these markets are well known to the buyers and sellers and provide liquidity to the markets. Several types of financial instruments are dealt with including stocks, bonds, agricultural commodities and precious metals.
    The economy would be worse off without these markets because it would become difficult to raise capital, it would be difficult to reduce risks and global trade would become difficult without currency markets. There would be no trade in stocks, bonds or warrants. There would be no bringing together of sellers and buyers that want to trade in financial securities.

    14-2. Define in a ...

    Solution Summary

    Raising Capital in the Financial Markets is discussed very comprehensively in this explanation..

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