Role and Functioning of Stock Markets Coursework

Role and Functioning of Stock Markets - Coursework Example Moreover, securities markets are further broken down into a primary market and a secondary market. A  stock market  is a private or public market for the trading of  stocks or shares  in companies at an  agreed upon price. These include securities listed on a  stock exchange  as well as those traded privately, also known as over the counter securities. A  stock market  is also known as an equity market (Papadopoulos, 2010). Primary Market and its Role: Primary market is the market in which newly listed companies issue their shares to be traded for the first time, changing hands from the newly listed company to the investors, mostly these first time investors are institutional investors for example pension funds, investment banks, credit unions. This process allows a company, the issuers of stocks, to acquire capital by offering their stocks to investors who in return would supply the capital required. Thereby making primary market that part of capital markets that d eals with the issuance of new securities. Privately or Publicly listed Companies, governments or public sector institutions can obtain funding for there projects in this way. Security dealers act as a bridge to link lender to the borrower of the fund. The process of selling new shares is called underwriting. The new stock issue is called an initial public offering (IPO). Dealers earn a commission that is part of the price of the security offering. (Papadopoulos, 2010). Secondary Market and its Role: The secondary market is an organized marketplace for securities. After the initial offering it is through this market that the general public gets the opportunity to be a stakeholder in a company. Licensed broker assist in the buying selling of these securities, along with the exchanges specialized trading system, in accordance with the rules and regulations established by the exchange (Alfaro, Chanda, Kalemi-Ozcan, and Sayek, 2004). When it comes to secondary market, investors in this m arket purchase securities from other investors in the market, rather than from the issuing company. In any secondary market transaction the cash proceeds go to the investors rather than the entity of which the original securities belonged to. The prices of the securities in this market are determined by the forces of supply and demand, this rule applies to every stock available for trading (Demirguc-Kunt and Levine, 1996). Overview of the functions of Stock Market: There are several  functions of stock market that makes it an integral part of the economy. It most important role is the channelling of funds or transferring of capital from investors to users of capital. This role of stock exchanges allows corporations looking to raise capital for enhancing their productive capabilities from investors in the primary market. The secondary market facilitates trade between buyers and sellers of stock and thereby enabling the investors to reach the true price of the stock or commodity. Th is feature of stock market is known as continuous pricing function. This feature enables interested parties to know at any time, what the price of a stock is. Price quotes can be accessed through financial websites and financial channels. This allows investors to assess the worth of their investment in a particular stock (Kale, Dyer, and Sing, 2002).   Stock market also plays the role of fair pricing. The workings of the stock market enable buyers and

NO MAN IS AN ISLAND Essay Example | Topics and Well Written Essays - 500 words

NO MAN IS AN ISLAND - Essay Example John Donne will mention in his poem â€Å"Each is a piece of the continent, A part of the main.† The poet actually referred to his own disease here (Jokinen, 2006).ii He says he is concerned no matter who struggles or who dies because every man is a part of the bigger picture (Donne, 1624). The agony affecting one might not take long to affect another. For example, consider you hit your leg hard on the floor. It is just a matter of few seconds, before the pains sweeps through your whole body. Though the damage is restricted to a small finger, the pain is felt in the core of the heart. The poet’s phrase â€Å"No man is an island† is an eternal phrase fit for any modern age. Man can use all the modern technology to live life comfortably. But, he needs others to share his joy or at least boast about his pleasure. Secondly, the aim of all this advanced technology is to establish quick communication between people. The more people communicate, the more they get to know about different cultures, they become broad minded and feel a sense of oneness. Facebook, Twitter, Mobile chats everything aims in establishing the same. The modern communication has actually broken the ethical and continental barriers so easily. Our youngsters have friends all over the world and have much acceptance towards various things considered taboo in our forefather’s age. â€Å"No man is an Island† can be interpreted in a much different manner too. There are several people in the modern age who boast about living without any commitments. They dwell in the comfy of their own privacy with all the sophisticated technology at their aid. But, they easily forget they still use the skill and help of all those who struggled to put this technology in place for them. It is every person’s duty to give back to the world in form of physical work, intellectual discoveries or loving care. A mother can tend to the children lovingly while the saint can pray