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Chapter Twenty One. SECURITIES MARKETS AND FIRMS. Underwriting Stocks and Bonds. Giving Advice When to offer? At what price? Filing Documents SEC Registration statement Prospectus Underwriting Syndicate Marketing Outcomes Fully subscribed Undersubscribed Oversubscribed - PowerPoint PPT Presentation
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Copyright © 2000 Addison Wesley Longman Slide #21-1
Chapter Twenty One
SECURITIES MARKETS AND FIRMS
Copyright © 2000 Addison Wesley Longman Slide #21-2
Underwriting Stocks and BondsGiving Advice
When to offer?At what price?
Filing DocumentsSECRegistration statementProspectus
UnderwritingSyndicate
Marketing OutcomesFully subscribed UndersubscribedOversubscribed
Best Efforts
Copyright © 2000 Addison Wesley Longman Slide #21-3
Copyright © 2000 Addison Wesley Longman Slide #21-4
Ten Largest Underwriters in the U.S.
Copyright © 2000 Addison Wesley Longman Slide #21-5
Securities Brokers and DealersBrokerage Service
Securities Orders Market Order
Limit Order
Other ServicesMargin Credit
Full-Service Brokers
Discount Brokers
Securities DealersMarket Makers
Copyright © 2000 Addison Wesley Longman Slide #21-6
Types of Investment Funds
Balanced Funds
Bond Funds
Value Funds
Growth Funds
Growth and Income Funds
Index Funds
Money Market Mutual Funds
Copyright © 2000 Addison Wesley Longman Slide #21-7
Mutual Funds on the Rise
Copyright © 2000 Addison Wesley Longman Slide #21-8
Distribution of Mutual Fund Net Assets by Type of Fund
Copyright © 2000 Addison Wesley Longman Slide #21-9
Household Ownership of Mutual Funds
Copyright © 2000 Addison Wesley Longman Slide #21-10
Fee Structure of Investment Funds
Open-End Fund
Closed-End FundLoad Funds
No-Load Funds
Copyright © 2000 Addison Wesley Longman Slide #21-11
Calculating a Mutual Fund’s Net Asset Value
Net Asset Value (NAV)Definition: Total value of the mutual fund’s stocks,
bonds, cash, and other assets minus any liabilities such as accrued fees, divided by the number of shares outstanding.
Stocks $35,000,000Bonds $15,000,000Cash $3,000,000
Total value of assets $53,000,000Liabilities -$800,000
Net worth $52,200,000Outstanding shares 15 millionNAV = $52,200,000/15,000,000 = $3.48
Copyright © 2000 Addison Wesley Longman Slide #21-12
Hedge Funds1. Take advantage of unusual spreads between security prices
2. Often highly leveraged 3. Relatively unregulated
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