lecture 9 Flashcards
The total market capitalization of the 80 organized stock exchanges tracked by the world federation of exchanges stood at
124,826 billion
From 2017 to 2021, the total market capitalization of all exchanges has increased by about
42%
Five largest stock exchanges at the end of 2021
New york stock exchange
NASDAQ
Euronext
Shanghai stock exchange
Japan exchange group
turnover ratio formula
the ratio of stock market transaction/ market capitalization of the stock market
Tunover ratios is one of the most well known measure of
stock market liquidity
stock market concentration formula
stock market concentration = market cap of the largest 10 companies / total market capitalization
Concentrated financial markets represent
poor access of firms to the stock market
secondary equity markets of the world serve two major purposes
provide marketability
Provide share valuation
Investors who buy shares from the issuing firm in the primary market
may not want to hold them indefinitely
The secondary market
allows those share owners (that bought shares on primary market) to reduce holdings of unwanted shares and purchasers to acquire the stock
Broker
when conducting trade in the secondary market, public buyers and sellers are represented by an agent known as a broker
Market order
is executed at the best price avaialbe in the market when the order is received, that is, the market price
Limit order
is an order away from the market price that is held in a limited order book until it can be executed at the desired price
Dealer market
The broker takes the trade through the dealer
Here dealer participates in trades as a principal by buying and selling the security for his own account
Agency market
the broker takes the clients order through the agent
That agent matches it with another public order. (Called also as brokers broker, central broker, official broker)
