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Market Participation

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Describe how businesses, government units, institutional investors, and individuals participate in money, stock, bond, and equity securities markets.

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Solution Summary

The following posting helps with problems involving market participation. It describes how businesses, government units, institutional investors and individuals participate in money, stocks, bonds and equity securities markets.

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First we consider the money market. Trading in money markets is done with the help of several instruments such as certificates of deposit, bills of exchange, federal funds, short lived mortgage, and asset backed securities. An individual may participate buying a certificate of deposit which is a safe short term investment. The businesses participate in money market by raising money by selling commercial paper. The government participates in the money market when the Federal Reserve carries out its open market transaction. These include buying or selling of securities. The financial institutions participate in the money market by borrowing and lending for ...

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