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Primary & Secondary Markets

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As a new operations manager for a major financial institution, explain what you consider to be a top mechanic of a primary market and a top mechanic of a secondary market. How would you explain the way the performance of your company is influenced by the activity of the markets you described?

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Top mechanics of primary and secondary markets are discussed in a structured manner in this response. The related references are also provided.

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As a new manager for a major financial institution, the underwriter is the top mechanic of the primary market. In the primary market, new bonds and stocks are sold to common people for the first time. In the primary market, the common people can buy stock or bonds direct from the issuing company. In a primary market are sold rights issues, initial public offerings, preferred allotments, and private placement. From this point of view, the top mechanic is the underwriter. This is a financial institution or a bank that promises to buy all the unsold stock on a specific issue. The issue of stocks is guaranteed to do well as the underwriter will buy whatever is not sold in the market. Underwriting is the top mechanic of the primary ...

Solution provided by:
Hatim Baxamusa, MBA
Education
  • BSc , University of Calcutta
  • MBA, Eastern Institute for Integrated Learning in Management
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