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Types of financial market :
1.
Capital market:
It refers to markets where long-term debt and equity
instruments are traded.
2.
Money market:
Short-term debt instruments with maturities of less than one
year are traded in the money market.
3.
Dealer market:
Such as over-the-counter markets decentralized markets
without a physical location and market participants execute trades through
various communication methods such as telephone, emails, instant messaging, and
proprietary electronic trading systems.
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Market efficiency and the efficient market
hypothesis:
Market efficiency means that the market price of securities takes into consideration all knowledge available
about that market, including public information about the economy, the specific
security, and the market in which the security is traded.
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Past pattern In prices and trading volume:
Investors may truly analyze past price movements to improve their return today as is done in technical analysis.
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All other published information:
All other published information is all the information that
investors can gain by reading financial news. It is a fundamental analysis.
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Private or inside information:
Board members, senior managers, and some employees of publicly
held companies may have access to inside information about their companies
before its released to the public. Such as information about earnings or pending mergers.
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Form of market efficiency:
They have classified them into 3 forms of market efficiency weak,
semi-strong, and strong.
Weak form efficiency says that market prices of securities
reflect all historical information.
Semi-strong form efficiency says that security prices reflect
not only historical prices and trading volume information but also other
published information.
Strong form efficiency suggested that security prices
reflect all possible information including the private information known only
to insiders.
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Insider trading:
trading is also prohibited when a person who receives information through a confidential relationship misappropriates the information for his or her own trading benefits or gives tips to others who
subsequently trade in a security.
Note: if the insurance is a larger issuance several investment banks may work together to make the issuance the
investment banks form a syndicate of underwriters who will buy the share and
then sell them.
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Shelf registration :
A shelf registration occurs when the securities are
registered, but not immediately issued or sold by the company.