Chapter12 - b Second way is stocks can be traded through...

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Matt Serna Mr. Mckenzie Personal Finance November 21, 2010 Chapter 12 1. What are the differences between a primary and secondary market? Which sells IPO’s and seasoned new issues? a. A primary market is a market in which new, as opposed to previously issued, securities are traded. A secondary market is securities that have previously been issued and bought are traded here. The primary market sells the IPO’s and seasoned new issues 2. Differentiate between “bid price” and “ask price” a. Bid price is the price at which an individual is willing to purchase a security. b. Ask price is the price at which an individual is willing to sell a security. 3. Three ways a US investor can purchase internation equities a. First way to buy an International stock is, some foreign shares are traded on exchanges in the United States
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Unformatted text preview: b. Second way is stocks can be traded through American depository receipts (ADR’s) c. Third is, you can actually go online and directly in international stocks through . 4. Name 2 securities regulation organizations. What is there primary purpose for securities market regulation? a. SEC (Securities and Exchange Commision) and The National Association of Securities Dealers. Theses organizations are meant to protect the investor and providing a level playing field so that all investors have a chance to make money. 5. What is “churning” and why is it a concern? a. Excessive trading in a security account that is inappropriate for the customer and serves only to generate commissions. And it is practically impossible to prove....
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