Financial Markets and the Investment Banking System

5 important questions on Financial Markets and the Investment Banking System

The three ways of transfering capital are...

  • direct transfer
  • indirect transfer using investment bankers
  • indirect transfer using the financial intermediary

What is the role of a Venture Capitalist?

They are the prime source of funding start-ups and companies in "turnaround" situations. High risks with potential of high returns

Indirect transfer via investment banks is

Use the investment bank to uptain funds. The bank gets the funds from investors with surplus funds
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Indirect transfer via financial intermediary is

the financial intermediary collects funs form savers in exchange for securities. The funds are then used to aquire securities form firms (such as stocks and bonds)

A public offering is

Via an investment bank, the securities are sold to whom ever is interested.

The issuing firm never actually meets the ultimate purchaser

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