Chapter 3 - The Primary & Secondary Markets (2%)

Question 1

Who are the two main users of Primary Markets?

Answer 1

Issuers of new securities (IPO)
Issuers of debt instruments

Question 2

What is a Secondary Market

Answer 2

Existing products are traded on an exchange

Question 3

How do members of the public access the secondary market

Answer 3

Brokerages, including robo advisors

Question 4

Why would a firm enter the primary market, through an IPO?

Answer 4

Raise Capital

Question 5

What is Flipping?

Answer 5

Extreme short trading of IPO Issues

Question 6

What does the term ‘Oversubscribed’ mean in terms of IPOs

Answer 6

Receive more orders for more shares than are being sold.

Question 7

Who sets the rules and regulations around the LSE

Answer 7

FCA

Question 8

What does Oversubscribing cause for an IPOs price?

Answer 8

increases, due to demand

Question 9

Who sets the rules and regulations around the US Market?

Answer 9

Securities and Exchange Commission (SEC)

Question 10

Who sets the rules and regulations around the China Market?

Answer 10

China Securities Regulatory Commission (CSRC)