In the _________, new shares are issued and sold to the investing public for the first time.
primary market
It is where capital is actually raised by the company selling stock directly to investors typically through an initial public offering. (PSE).
Primary Market
An __________ is the process by which a company offers equity to the investors and becomes a publicly-traded company. Through this, a company can raise funds and investors are able to invest in a company for the first time.
initial public offering (IPO)
The ________ is where existing shares, debentures, bonds, etc. are traded among investors.
secondary market
Securities that are offered at the primary market are traded on the _________.
secondary market
It is where the original shareholders sell their shares to other investors. An investor can only make a profit when he can sell his shares at a price higher than the purchase price.
Secondary Market
This market gives a continuous reflection of the value of securities (prices) at some point in time according to the best available information. (PSE)
Secondary Market
Thus, if you decide to buy existing shares of ABC Corporation, you cannot buy them directly from the issuing company anymore since they have all been sold to the investing public during the 1)_________. So, how can you avail of ABC Corporation shares when the IPO has been completed? Investors can only buy these shares from existing shareholders who are willing to sell their shares. When they do so, it is a 2)________ transaction. The proceeds from this transaction do not go to the issuing corporation; instead, they go to the investor who sold his shares.
- initial public offering
- secondary market
The __________ is where short-term funds are raised through the buying and selling of short term (maturity date is one year or less) debt securities such as commercial papers, certificate of deposits, promissory note, short-term (90 days) treasury bill, etc.
money market
The 1)_________ is where long-term (maturity date is more than one year) are funds are raised through the bond market, which deals with long-term debt securities such as bonds, the stock market which deals with equity securities or stocks. In the Philippines, it is subdivided into 3 parts: 2)_______, 3)________ and 4)_________.
- capital market
- bond market
- stock market
- mortgage market
_________ is an organized activity involving the buying and/or selling of securities done within a stock exchange.
Stock market
Also, it is a financial market where the common and preferred stocks issued by corporations are traded.
Stock Market
1)__________ gives no voting rights to shareholders while 2)_______ have. 3)_______ have priority over a company’s income, meaning they are paid dividends before 4)________.
- Preferred stock
- common stocks
- Preferred
shareholder - common shareholders
___________ are last in line when it comes to company assets, which means they will be paid out after creditors, bondholders, and preferred shareholders.
Common stockholders
The _________ primarily includes government-issued securities and corporate debt securities, and facilitates the transfer of capital from savers to the issuers or organizations requiring capital for government projects, business expansions and ongoing operations.
bond market
General classification of Bond Market: (3)
- Treasury Notes and Bonds Market
- Municipal Bonds Market
- Corporate Bonds Market
1)________ are issued by the government’s treasury. Like T-bills, T-notes and T-bonds are backed by the full faith and credit of the government and are therefore free from risks. As a result, they pay relatively low rates of interest (yields to maturity) to investors. However, because of longer maturity, they are subject to wider price fluctuation than money market instruments and therefore subject to 2)________.
- Treasury notes and bond
- interest rate risk
_________ is an important financial instrument for development.
Municipal bond (LGU)
In the Philippines, __________ have only recently been acknowledged as a potential tool for development.
LGU bonds
_________ reduces the dependence of LGUS on the national government implementing their development programs, and most importantly, encourages and rewards transparent good governance among local government executives.
LGU bond
________ does all the while attracting private institutional capital and providing the investing public with alternative long-term investment instrument.
LGU bond
_________ are long-term bonds issued by private corporations.
Corporate bonds
__________ is the legal contract that specifies the rights and obligations of bond issuer and bondholders (investors), term of the bond, interest rate, and interest payment dates. It may include such term as the ability of the issuer to call the bond or redeem bonds prior to maturity, and restrictions on the issuer’s dividend payments, among others.
Bond indenture
The term ________ is commonly used to described a type of security which market value is directly related to or derived from another traded security.
derivative
