1、Primary Markets versus Secondary MarketsChapter 7Lead-inLanguage NotesKey PointsFollow-up Tasks7.17.37.27.4CONTENTSExtended Tasks7.57.1Lead-inThis chapter will first of all look at the primary marketthe primary market.Secondly,it will look at the secondary marketthe secondary market.Finally,it will
2、make a comparisonmake a comparison between the two.A primary market is a place where companies bring a new issue of shares for being subscribed by the general public for raising funds to fulfil their long-term capital requirement like expanding the existing business or purchasing new entity.The publ
3、ic issue has two types,including Initial Public Offer(IPO)and Further Public Offer(FPO).Primary Markets7.2 Key Points7.2.1 Primary MarketsA secondary market is a place where financial instruments such as stocks can be traded that is,rebought and resold.Functions:first,Secondary markets provide a cen
4、tralized marketplace where economic agents know they can transact quickly and efficiently.Second,Secondary markets offer benefits to both investors and issuing corporations.Third,Secondary markets offer buyers and sellers liquidity the ability to turn an asset into cash quickly as well as informatio
5、n about the prices or the value of their investments.Secondary Markets7.2 Key Points7.2.2 Secondary Markets7.2 Key Points7.2.3 Differences between Primary Markets and Secondary MarketsDefinitionAnother namePurchasing typeFunding serviceTransaction times of a single securityTraders of transactionsBen
6、eficiary of transactionsIntermediary rolePriceOrganizational differencebailout belat 救助broker brk(r)经纪人claim klem 索款，索赔commission kmn 佣金debenture dbent(r)公司债券illiquid lkwd 非流动性的intermediary ntmi:diri 中介magnitude mgntju:d 等级7.3 Language NotesI.Wordsmeltdown meltdan 崩溃obligation blgen 债务，证券offering fr
7、 发行payoff pe:f 收益preferential prefrenl 优先选择的，优惠的underwriter ndrat(r)承销商bulk purchaseeconomic agent Further Public Offer(FPO)initial public offer(IPO)issuing corporationNational Association of Securities Dealers Automated Quotation(NASDAQ)systemNew York Stock Exchange(NYSE)preferential allotment7.3 L
8、anguage NotesII.Phrases primary markets primary securityprivate placementpublic issue rights issuesecondary marketssecurity issuer the U.S.Treasury 美国财政部unit of account计量单位1.A primary market is a place where companies bring a new issue of shares for being subscribed by the general public for raising
9、 funds to fulfil their long-term capital requirement like expanding the existing business or purchasing new entity.2.By issuing primary market securities with the help of an investment bank,the funds user saves the risk and cost of creating a market for its securities on its own.3.The company who br
10、ings the IPO is known as the issuer,and the process is regarded as a public issue.4.Secondary markets offer buyers and sellers liquiditythe ability to turn an asset into cash quicklyas well as information about the prices or the value of their investments.5.Primary market encourages direct interacti
11、on between the company and the investor,while the secondary market is opposite where brokers help out the investors to buy and sell the stocks among other investors.7.3 Language NotesIII.Sentences 7.4 Follow-up TasksI.MatchingDirections:Match the English words and phrasesEnglish words and phrases in
12、 the leftleft column with the proper ChineseChinese equivalents in the rightright column.()1.centralized marketplaceA.预发行证券()2.derivative securitiesB.养老基金()3.financial crisis C.对储蓄的利用()4.financial system D.交易量()5.financial instrumentE.集中市场()6.pension fundF.衍生证券()7.pre-issued securityG.金融工具()8.public
13、 offeringsH.金融体制()9.trading volumeI.金融危机()10.utilization of savingJ.公开发售7.4 Follow-up TasksII.JudgmentsDirections:Decide whether each of the following statements is true(T)true(T)or false(F).1.Both the primary markets and the secondary markets are important parts of the capital markets.()2.Generally
14、 speaking,privately placed securities are highly liquid by nature.()3.The New York Stock Exchange and the NASDAQ system are famous secondary markets in the United States and the world.()4.The derivative securities markets had existed for a long time,but didnt grow robustly until the 1980s.()5.On the
15、 secondary market,small investors can have a better chance of buying or selling securities on the primary market.()7.4 Follow-up TasksIII.Short Answer Questions Directions:Answer each of the following questions brieflybriefly.1.What do the financial instruments on the primary market include?2.What d
16、o the financial instruments on the secondary market include?3.What benefits can secondary markets offer to investors and issuing corporations?4.What benefits can secondary markets offer to buyers and sellers?5.How are primary markets different from secondary markets in terms of the sale approach of
17、securities?7.4 Follow-up TasksIV.Translation Directions:Translate the following Chinese paragraph into Englishinto English.一级市场，又称为发行市场或初级市场，是资本需求者将证券首次出售给公众时形成的市场。它是新证券和票据等金融工具的买卖市场。该市场的主要经营者是投资银行、经纪人和证券自营商。二级市场是证券交易市场，又称为“次级市场”或“证券流通市场”。它是已发行的有价证券买卖流通的场所，是有价证券所有权转让的市场。它一方面为证券持有者提供变现机会，使其在需要现金的时候能够
18、出卖证券得以兑现，另一方面为新的储蓄者提供投资的机会。With money in your pocket,you are wise and you are handsome and you sing well too.Yiddish proverbThe IPO is no exit for the entrepreneur;its the start of purgatory.Vivek WadhwaStock market bubbles dont grow out of thin air.They have a solid basis in reality,but reality as
19、distorted by a misconception.George SorosThe IPO is no exit for the entrepreneur;its the start of purgatory.Vivek WadhwaId love to see the secondary markets become more widespread in terms of their adoption.Peter Barris7.5 Extended TasksI.Proverbs and Quotes7.5 Extended TasksII.Interview ExcerptEuge
20、ne Fama(above left)is the 2013 Nobel laureate in economic sciences.He is widely recognized as the“father of modern finance”.Richard Thaler(above right)is the 2017 recipient of the Nobel Prize in Economic Sciences for his contributions to behavioral economics.In this debate excerpt,Fama and Thaler argue over the efficacy of the market in the modern economy.7.5 Extended TasksIII.Movie ClipThis clip shows how the stock brokers make money by IPO.Thanks
