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 market. Secondly, it will look at the secondary market. Finally, it will make a comparison between the two.

2、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 public issue has two types ,including Initial Public O

3、ffer (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 centralized marketplace where economic agent

4、s 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 information about the prices or the value of

5、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 transactionsBeneficiary of transactionsIntermedia

6、ry rolePriceOrganizational differencebailout belat 救助broker brk(r) 經(jīng)紀(jì)人claim klem 索款，索賠commission kmn 傭金debenture dbent(r) 公司債券illiquid lkwd 非流動(dòng)性的intermediary ntmi:diri 中介magnitude mgntju:d 等級7.3 Language NotesI. Wordsmeltdown meltdan 崩潰obligation blgen 債務(wù)，證券offering fr 發(fā)行payoff pe:f 收益preferential p

7、refrenl 優(yōu)先選擇的，優(yōu)惠的underwriter ndrat(r) 承銷商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 Language NotesII. Phrases

8、 primary markets primary securityprivate placementpublic issue rights issuesecondary marketssecurity issuer the U.S. Treasury 美國財(cái)政部unit of account計(jì)量單位1. A primary market is a place where companies bring a new issue of shares for being subscribed by the general public for raising funds to fulfil thei

9、r 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 brings the IPO is kn

10、own 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 interaction between the

11、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 phrases in the left column with the proper Chi

12、nese equivalents in the right column. ( )1. centralized marketplaceA. 預(yù)發(fā)行證券( )2. derivative securitiesB. 養(yǎng)老基金( )3. financial crisis C. 對儲(chǔ)蓄的利用( )4. financial system D. 交易量( )5. financial instrumentE. 集中市場( )6. pension fundF. 衍生證券( )7. pre-issued securityG. 金融工具( )8. public offeringsH. 金融體制( )9. tradi

13、ng volumeI. 金融危機(jī)( )10. utilization of savingJ. 公開發(fā)售7.4 Follow-up TasksII. JudgmentsDirections: Decide whether each of the following statements is true (T) or false (F). 1.Both the primary markets and the secondary markets are important parts of the capital markets. ( )2.Generally speaking, privately

14、 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 secondary m

15、arket, 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 briefly.1. What do the financial instruments on the primary market include?2. What do the financ

16、ial 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 securitie

17、s?7.4 Follow-up TasksIV. Translation Directions: Translate the following Chinese paragraph into English.一級市場，又稱為發(fā)行市場或初級市場，是資本需求者將證券首次出售給公眾時(shí)形成的市場。它是新證券和票據(jù)等金融工具的買賣市場。該市場的主要經(jīng)營者是投資銀行、經(jīng)紀(jì)人和證券自營商。二級市場是證券交易市場，又稱為 “次級市場”或“證券流通市場”。它是已發(fā)行的有價(jià)證券買賣流通的場所，是有價(jià)證券所有權(quán)轉(zhuǎn)讓的市場。它一方面為證券持有者提供變現(xiàn)機(jī)會(huì)，使其在需要現(xiàn)金的時(shí)候能夠出賣證券得以兌現(xiàn)，另一方面為新的儲(chǔ)蓄

18、者提供投資的機(jī)會(huì)。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 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