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Unformatted text preview: Summary This chapter centers on the market environment in which corporations raise long-term funds, including the structure of the U.S. financial markets, the institution of investment banking, and the various methods for distributing securities. It also discusses the role interest rates play in allocating savings to ultimate investment. Corporations can raise funds through public offerings or private placements. The public market is impersonal in that the security issuer does not meet the ultimate investors in the financial instruments. In a private placement, the securities are sold directly to a limited number of institutional investors. The primary market is the market for new issues. The secondary market represents transactions in currently outstanding securities. Both the money and capital markets have primary and secondary sides. The money market refers to transactions in short-term debt instruments. The capital market, on the other hand, refers to transactions in long-term financial instruments....
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This note was uploaded on 04/16/2008 for the course FIN 100 taught by Professor N/a during the Spring '08 term at Baylor.
- Spring '08
- Financial Markets