What Is the Capital Market - How Is the Primary Market Different from the Secondary Market?

Wk1 DQ1

Please post a 200-250 word reply answering the following questions:

What is the capital market?

How is the primary market different from the secondary market?

In your opinion, are these markets efficient? Why?

A financial market that works as a medium for supple and demand of debt and equity capitol. It funnels money from the investor to borrower through different financial tools like bonds, notes, shares which we call securities.

A capitol market is a system made up of the stock market, bond market, money market. A market where long term funds and securities are traded to include stocks and bonds. Companies use capitol markets to increase funds for operations and on going activities. Investors will buy these securities in hopes of making a profitable return on those securities. The difference between the primary market and secondary market is that the primary market is a market with new securities are offered and bought for and sold for the first time. Some organizations can build long-term capitol by selling their stocks directly to the investors. The secondary market is where the majority of trading previously issued securities with other investors and provides liquidity to the market. I think it is efficient market because the purpose is when businesses and investors work with each other to generate more profits for the companies. Supply and demand will dictate the prices in the market and when stocks rise and fall, this allows the investors to make more money, which in turn will help the companies issuing those securities help create more securities.

DQ2

Please post a 200-250 word reply answering the following questions:

What are three primary roles of the U.S. Securities and Exchange Commission (SEC)?

How does the Sarbanes-Oxley Act of 2002 augment the SEC's role in managing financial governance?

Do you think businesses became more ethical after Sarbanes-Oxley was passed? Provide examples to support your answer.

The U.S. Securities and Exchange Commission has three primary objectives or roles. The first role is to protect investors by establishing and enforce rules of operation. The second roles are to maintain structured, equal, efficient efficient markets and ensure they operate in a fair and orderly manner. In the third role is to facilitate capital through oversight and policies. By maintaining oversight of the capital market the SEC works to insure that as people use the market to invest their investments are protected. Since securities tend to gain and lose value at any given time, meaning that investors can gain or lose money. The SEC tries to maintain the efficiency of the market so that they can protect investors from wrong information and biased trading practices.

The Sarbanes-Oxley Act augments the SEC's role in managing financial governance by review of financial statements, enhancing the enforcement program, increased frequency of reviews of investment advisers and companies, and conducts more broker/dealer examinations (SEC, 2003). The Sox Act increases the review of each registrant's financial statements to a minimum of every three years. The Sox Act increases the amount of enforcement allowed so that investigations can occur more quickly and be resolved sooner. The Act increases the frequency

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