ADMS 3541 Lecture Notes - Lecture 22: Nasdaq, Efficient-Market Hypothesis, Otc Markets Group

• School: York University
• Department: Administrative Studies
• Course: ADMS 3541
• Professor: Alan Go

Document Summary

For buying equities, the secondary market is commonly referred to as the "stock market. " This includes the new york stock exchange (nyse), nasdaq, and all major exchanges around the world. The defining characteristic of the secondary market is that investors trade among themselves. That is, in the secondary market, investors trade previously issued securities without the issuing companies" involvement. For example, if you go to buy amazon (amzn) stock, you are dealing only with another investor who owns shares in amazon. Amazon is not directly involved with the transaction. In the debt markets, while a bond is guaranteed to pay its owner the full par value at maturity, this date is often many years down the road. Instead, bondholders can sell bonds on the secondary market for a tidy profit if interest rates have decreased since the issuance of their bond, making it more valuable to other investors due to its relatively higher coupon rate.