Reference no: EM133085581

Question - The primary market is where a company's securities are created. This is where the initial sale of stocks and bonds takes place. Investors would spend less money purchasing on the primary market rather than the secondary market. The primary market is guided by strict regulations. No sales can be made or offered until all paperwork is filed with the correct agencies. Once the initial sales are complete everything moves to the secondary market.

The secondary market involves the buying and selling of stocks and bonds This is also where mortgage banks sell loans to investors. Investors will most likely pay higher prices when buying from the secondary market.

The company will have initial profits from its primary market sales. Utilizing the profit from the secondary market they will be able to sustain marketing and financial needs. Since they will be producing monetary assets, this will allow their capital to grow by more investors purchasing stocks and bonds on the secondary market. The bottom line is that after the initial investments the productivity of the company will determine how they grow within the secondary market.

-If I was on your company's board, how do you know where to invest and how do you know how the secondary markets are going to affect your investments?

-What numbers would you look at to know that you have a company that is poised for growth and if this is something that you could invest in?

-Is there an amount of time that you look at these numbers or is it a pattern that you were looking for?