Secondary market, Financial Management

The secondary market is a market where the investor purchases a security from another investor rather than from the issuing corporation. This market is secondary because the trading takes place after the issuer sells its securities to investors in the primary market. Due to this feature, the secondary market is also called as 'After Market'.

The securities traded in this market are of two types -

(i) On-the-run treasury securities; and

(ii) Off-the-run treasury securities.

  • On-the-run treasury securities are the most recently issued treasury securities and are traded at a higher price when compared to that of 'off-the-run securities'.

  • Off-the-run treasury securities are the treasury securities issued at previous auctions with nearly identical terms to maturity. In other words, when a treasury security of any maturity is issued, then the previously issued security with the same maturity becomes off-the-run treasury. These securities are less frequently traded, less expensive and carry slightly higher yield.

Secondary Market is vital for any efficient market because it adds high liquidity and transparency.

Posted Date: 9/8/2012 6:48:38 AM | Location : United States







Related Discussions:- Secondary market, Assignment Help, Ask Question on Secondary market, Get Answer, Expert's Help, Secondary market Discussions

Write discussion on Secondary market
Your posts are moderated
Related Questions
How does a preemptive right protect the interests of existing stockholders? A preemptive right defends the interests of existing stockholders by providing them the opportunity to

What are the assumptions of MM(Modigliani Miller) approach?

Which ratios would a potential long-term bond investor be most interested in? Explain. Potential and Current lenders of long-term funds, such as bondholders and banks, are con

Q. Explain about Cash Flow Statement? Cash Flow Statement: - This is another process of cash management. A cash flow statement is the statement showing inflows as well as outfl

Do you guys provide Currency Options assignment help? I need writing a report on Currency Options and it is about 2000 words. Let me know. I need to buy your solution.

drow decision table of financee managment system

The risk free rate is 10 percent and the expected return on the market portfolio is 14 percent. A firm considers a project that is expected to have a beta of 1.3, whereas the beta

1. List five different types of resource that a company might consider hiring or leasing. Explain why the might choose these option instead of outright purchase 2. List three di

Part 1: Contingency plan Create contingency plans for the following scenarios: > One of your highly qualified consultants has given three months notice and is planning to move to a

Explain the concept of the world beta of a security. Answer:  The world beta calculates the sensitivity of returns to a security to returns to the world market portfolio. It is