Chapter 3 Securities markets PROBLEM SETS SOLUTIONS Basic 1. An IPO is the first time a formerly privately owned company sells shares to the general public. A placement is the issuance of shares by a company that has already undergone an IPO. 2. Costs can be categorised as explicit, such as brokerage fees, or implicit such as the bid−ask spread and market impact. 3. The primary market is the market for new issues of securities, while the secondary market is the market for already-existing
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Incorporation by the North-Point Large Cap fund. The mutual fund manager, Kimi Ford is evaluating Nike’s financial performance. Nike’s revenues had stabilized at $9 Billion since 1997 and Net Income had fallen from $800 Million to about $580 Million. In sum, Nike was experiencing a decline in sales growth, profits as well as its market share in US. In a meeting in 2001, the management sought to increase its market exposure in the mid-priced footwear and apparel lines to revitalize growth and to cut down expenses
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MARKET EFFICIENCY - DEFINITION AND TESTS What is an efficient market? Efficient market is one where the market price is an unbiased estimate of the true value of the investment. Implicit in this derivation are several key concepts - (a) Market efficiency does not require that the market price be equal to true value at every point in time. All it requires is that errors in the market price be unbiased, i.e., that prices can be greater than or less than true value, as long as these
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Introduction: The capital market is the engine of growth for an economy, and performs a crucial role in acting as an intermediary between savers and companies seeking additional financing for business expansion. Stock market is part & parcel of capital market. Contribution of any stock exchange generally leads to economic growth by increasing the funds to finance industry and other enterprise. Stock Exchange is an autonomous body formed by shareholders/members. It can take various decisions independently
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TBP 4322 Definition of financial system A financial system can be defined at the global, regional or firm specific level. The firm's financial system is the set of implemented procedures that track the financial activities of the company. On a regional scale, the financial system is the system that enables lenders and borrowers to exchange funds. The global financial system is basically a broader regional system that encompasses all financial institutions, borrowers and lenders within the global
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formation（employee training）：generalist----France 不利于radical innovation； Financial system Strategy: 想建立双元制企业 ambidextrous 政府支持 并购可以低成本扩张，规模效应，资产增值，提高行业进入成本 B. 为什么好收购 USA：Financial market liquid; venture capital strong bb 允许hostile takeover France：two tier; social distance--- employee no power; CEO is Chairman, high power; ownership control---direct & market control的combine （员工，股东都不能影响决策，只有state和CEO有影响和决策） 收购share price快速上涨，美国financial system和法国corporate governance的优点是成功的原因；法国的缺点是失败的原因 税前利润
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CHAPTER 2 FINANCIAL MARKETS AND INSTITUTIONS 1. You recently sold 100 shares of Microsoft stock to your brother at a family reunion. At the reunion your brother gave you a check for the stock and you gave your brother the stock certificates. Which of the following best describes this transaction? a. This is an example of a direct transfer of capital. b. This is an example of a primary market transaction. c. This is an example of an exchange of physical assets. d. This is an example of
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Efficient Market Theory: An investment theory that states it is impossible to "beat the market" because stock market efficiency causes existing share prices to always incorporate and reflect all relevant information. According to the EMH, stocks always trade at their fair value on stock exchanges, making it impossible for investors to either purchase undervalued stocks or sell stocks for inflated prices. As such, it should be impossible to outperform the overall market through expert stock selection
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Strategic objectives 9 Value creation and long-term sustainability 10 HSBC Values 11 Our strategy Business model 12 Market presence 13 Organisation 15 Governance 16 Global businesses 18 Employees 21 Risk overview Strategic priorities 26 Grow the business and dividends 26 Implement Global Standards 28 Streamline processes and procedures Outcomes 28 Financial performance 34 Remuneration 36 Sustainability Directors 40 Directors Supplementary information 42 Status of the
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Understanding the Rolling Settlement Learning Objectives: After reading this chapter, you should be able: 1. To identify the various segments into which the market is divided. 2. To recognize the activities performed at various stages of trading, clearing, settlement and post settlement in various markets. 3. To apply the knowledge of the working of the market in real life situation. 4. To examine the present system in the light of historical perspective. Your guide engine to learning: 6.1 6.2 Introduction
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