Secondary market, Financial Management

Assignment Help:

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.


Related Discussions:- Secondary market

Explain the working of insurance companies, Insurance companies The pri...

Insurance companies The primary purpose of insurance companies is to protect individuals and firms known as policy-holders from adverse events. Insurance companies receive prem

Please help me solve this question, there are 3 compaies i have to find out...

there are 3 compaies i have to find out the price of equity share by using walters and gordons model.

Debt securities, Fixed income security is a financial obligation of an ...

Fixed income security is a financial obligation of an entity, which promises to pay a pre-specified amount of money at per-specified date. Debt securities (

Define u.s. dollar and the canadian dollar, Under what circumstance would t...

Under what circumstance would the U.S. dollar and the Canadian dollar be said to have achieved purchasing power parity? The U.S. dollar and the Canadian dollar would be referred

Define forward exchange rate will be an unbiased predictor, Explain the con...

Explain the conditions under which the forward exchange rate will be an unbiased predictor of the future spot exchange rate. Answer:  the conditions when forward exchange rate

Briefly explain tagna, TAGNA (a) Market effectiveness is commonly discu...

TAGNA (a) Market effectiveness is commonly discussed in terms of pricing efficiency. A stock market is expressed as efficient when share prices fully and fairly reflect relevan

Annual tax shield, What is the annual tax shield to a firm that has total a...

What is the annual tax shield to a firm that has total assets of $80 million and a net worth of $55 million, if the average interest rate on debt is 8.5% and the marginal tax rate

Australian securities and investment commission, Australian Securities and ...

Australian Securities and Investment Commission: The Australian Securities and Investment Commission (ASIC) is an independent government body established by the ASIC Act 1989.

Leverage, EVALUATE THE IMPORTANCE OF LEVERAGE IN FINANCIAL MANAGEMENT OF SM...

EVALUATE THE IMPORTANCE OF LEVERAGE IN FINANCIAL MANAGEMENT OF SMALL SCALE COMPANY

Describe a.i.g''s business model and structure, A.I.G. is often called the ...

A.I.G. is often called the largest insurance entity in the world. A.I.G.'s total assets were $860 billion on 12/31/2008 (dwarfing any other insurance entity) with 116,000 employees

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd