Chapter 3: The Primary and Secondary Markets Flashcards
1
Q
What does the primary market do?
A
Facilitate the new issue of securities
2
Q
What is the secondary market?
A
Where existing securities are traded between investors
3
Q
Who issues into primary markets?
A
Corporations, debt issuers
4
Q
Who purchases in primary markets?
A
Institutional investors
E.g. Funds, ETFs, Insurance, CIVs
Can buy on behalf of clients
5
Q
What does “flipping” refer to
A
Buying IPO in primary market then selling in secondary market in anticipation of increase in price
6
Q
How does an IPO become oversubscribed?
A
When there is more orders for shares, than shares available
7
Q
How to HFTs contribute to market structure?
A
Constant trading means constant liquidity
8
Q
Who sets the rules for LSE listings?
A
FCA
9
Q
What is the regulator in China?
A
CSRC
China Securities Regulatory Commission
10
Q
A
