Scribd
Upload
54 views7 pages

Describe The Different Markets For Stock and Bonds

Uploaded by

creamycrizz
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
54 views7 pages

Describe The Different Markets For Stock and Bonds

Uploaded by

creamycrizz
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
You are on page 1/ 7

DESCRIBE THE DIFFERENT

MARKETS FOR STOCK AND


BONDS
SUBMITTED BY: CEDRIC AVIRA & JONATHAN ABALLE
Stocks and bonds are two primary types of
financial instruments available in the market, each
catering to different types of investors and serving
different purposes in finance. Here's a brief
overview of the different markets for stocks and
bonds:
STOCK MARKETS

• Stock markets, also known as equity markets, are


platforms where shares of publicly traded companies are
bought and sold. Investors in the stock market can gain
ownership stakes in companies, potentially benefiting
from dividends and capital gains if the company grows in
value. The stock market is divided into two main
segments
PRIMARY MARKET
• This is where new issues of stocks, known as Initial Public
Offerings (IPOs), are sold directly to investors. The primary market
facilitates companies to raise new capital from investors.
Secondary Market: After stocks are issued in the primary market,
they are traded among investors in the secondary market. This is what
most people refer to when they talk about the stock market (e.g., the
New York Stock Exchange or Nasdaq). Prices in the secondary
market fluctuate based on supply and demand.
BOND MARKETS
Bond markets, or fixed-income markets, involve the trading of
debt securities. When investors buy bonds, they are essentially
lending money to the issuer (which can be governments,
municipalities, or corporations) in exchange for periodic interest
payments and the return of the bond's face value at maturity. The
bond market also has two main segments
PRIMARY MARKET FOR BONDS
• This is where new bonds are issued and sold to investors, allowing
issuers to raise capital. The terms of the bond, including the
interest rate and maturity date, are determined at issuance.
Secondary Market for Bonds: After bonds are issued, they can be
bought and sold among investors in the secondary market. Bond
prices in the secondary market can fluctuate based on changes in
interest rates, the creditworthiness of the issuer, and other factors.
DIFFERENCES BETWEEN STOCK AND BOND
MARKETS RISK AND RETURN:
Stocks are generally considered riskier than bonds but offer higher potential returns.
Bonds are seen as safer investments, providing regular income through interest
payments, but with lower potential returns compared to stocks.
Ownership vs. Debt: Buying stocks gives investors partial ownership in a company,
while buying bonds means lending money to the issuer.
Income: Stocks may pay dividends, which are not guaranteed and can vary. Bonds
typically pay fixed or variable interest, offering more predictable income.
Market Volatility: Stock markets tend to be more volatile than bond markets,
reflecting the higher risk and potential reward of equity investments. Both markets play
crucial roles in the global financial system, offering opportunities for growth, income,
and diversification to investors.

You might also like

pFad - Phonifier reborn

Pfad - The Proxy pFad of © 2024 Garber Painting. All rights reserved.

Note: This service is not intended for secure transactions such as banking, social media, email, or purchasing. Use at your own risk. We assume no liability whatsoever for broken pages.


Alternative Proxies:

Alternative Proxy

pFad Proxy

pFad v3 Proxy

pFad v4 Proxy