Thanks to visit codestin.com
Credit goes to www.scribd.com

Scribd
Upload
43 views1 page

Securities Market Is A Component of The Wider Financial Market Where Securities Can Be

The document discusses several topics related to securities markets and investments. It defines securities markets as where securities like stocks, bonds, and derivatives can be bought and sold based on supply and demand. Securities markets have primary markets where new securities are issued and secondary markets where existing securities are traded, such as on stock exchanges or over-the-counter. Knowing secondary markets exist increases willingness to hold securities since they can be sold for cash. The document also lists several types of market risk like currency risk, equity risk, inflation risk, commodity risk, and interest rate risk. It defines commercial paper as short term corporate debt used for financing that matures within 270 days and is usually issued at a discount. Finally, it provides definitions of what constitutes

Uploaded by

Mk Fisiha
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
43 views1 page

Securities Market Is A Component of The Wider Financial Market Where Securities Can Be

The document discusses several topics related to securities markets and investments. It defines securities markets as where securities like stocks, bonds, and derivatives can be bought and sold based on supply and demand. Securities markets have primary markets where new securities are issued and secondary markets where existing securities are traded, such as on stock exchanges or over-the-counter. Knowing secondary markets exist increases willingness to hold securities since they can be sold for cash. The document also lists several types of market risk like currency risk, equity risk, inflation risk, commodity risk, and interest rate risk. It defines commercial paper as short term corporate debt used for financing that matures within 270 days and is usually issued at a discount. Finally, it provides definitions of what constitutes

Uploaded by

Mk Fisiha
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 1

1.

Securities market is a component of the wider financial market where securities can be


bought and sold between subjects of the economy, on the basis of demand and supply. Securities
markets encompasses stock markets, bond markets and derivatives markets where prices can be
determined and participants both professional and nonprofessionals can meet.
Securities markets can be split into below two levels. Primary markets, where new securities are
issued and secondary markets where existing securities can be bought and sold. Secondary
markets can further be split into organized exchanges, such stock exchanges and over-the-
counter where individual parties come together and buy or sell securities directly. For securities a
holder knowing that a secondary market exists in which their securities may be sold and
converted into cash increases the willingness of people to hold stocks and bonds and thus
increases the ability of firms to issue securities.

2. There are several different risk factors that make up market risk.

 Currency risk: The risk that exchange rates will go up or possibly down

 Equity risk: The risk that share prices will go up or down

 Inflation risk: the potential for inflation to increase the price of all goods and services
such that it undermines the value of money

 Commodity risk: the possibility of commodity prices such as metals change value
dramatically

 Interest rate risk: the risk that comes from an increase or decrease in interest rates

3. Commercial paper is an unsecured, short-term debt instrument issued by a corporation,


typically for the financing of accounts payable and inventories and meeting short-term liabilities.
Maturities on commercial paper rarely range longer than 270 days. Commercial paper is usually
issued at a discount from face value and reflects prevailing market interest rates.

4. What Is an Investment?
An investment is an asset or item acquired with the goal of generating income or appreciation. In
an economic sense, an investment is the purchase of goods that are not consumed today but are
used in the future to create wealth. In finance, an investment is a monetary asset purchased with
the idea that the asset will provide income in the future or will later be sold at a higher price for a
profit.

5. The action or process of investing money for profit

You might also like