Vol 1 Chapter 2 Flashcards
1
Q
Benefits of secondary markets
A
Liquidity provision
Price discovery:
2
Q
Liquidity provision
A
the ability to buy/sell an asset at a price close to its current market prices
Liquid market; thick, illiquid market; thin
3
Q
Price discovery:
A
Through trading, investors identified the equilibrium price of an asset
Useful for determine companies’ cost of capital and in judging its performance
4
Q
Dark Pool:
A
Private financial forum or exchange for trading securities
5
Q
· Electronic communication networks (ECNs)
A
Computer systems for trading securities outside an exchange
