Chapter 2 (part 1)

Question 1

What is a financial intermediary?

Answer 1

A organization that facilitates the transfer of capital and securities between suppliers and users.

Question 2

What are the 2 main roles of Investment Dealers?

Answer 2

1. Investment Dealers help to transfer capital from savers to users through the underwriting and distribution of new securities.
2. Investment Dealers maintain secondary markets in which previously issued shares can be traded.

Question 3

What is a Investment Dealer?

Answer 3

An Individual or firm who acts on behalf of another party to buy and sell securities.

Question 4

What are the 3 types of Firms?

Answer 4

1. Integrated firms
2. Institutional firms
3. Retail firms

Question 5

What is an Integrated Firm?

Answer 5

They offer all products and services in the financial industry. Including debt and equity trading, research and advice, portfolio management, merger and acquisition advice and tax counselling.

Question 6

What is a Retail Firm?

Answer 6

They are either full-service firms or discount brokers. Full-service firms offer a wide variety of products and service to retail investors. Discount brokers offer lower rates but do not give any advice.