Question: 1 . Primary vs Secondary Market Transactions. Why do we differentiate between primary and secondary market transactions. 2 . Division of Capital Risk, Return and

1. Primary vs Secondary Market Transactions. Why do we differentiate between primary and secondary market transactions.
2. Division of Capital Risk, Return and Contril. Explain why the bondholders are willing to accept a lower rate of return than stockholders in the same firms.
3. Division Of Capital Risk, Return and Control. Explain why equity pwnership (stocks) is often much more valuable than debt ownership(bonds) in public corporations.
4. Primary Market Equity Issues. What effect does a primary market equity issue have on the firm? What is this used for?
5. Bond Rates and Maturity. If you have twon bons of diffent maturities issued by the same firm, which would you expect to have a higher coupon rate?
6. Primary Market Debt Retirement. Under what condition would a firm decide to retire some of its outstanding debt earlier?
7. Money Market Instruments. Why are money market instruments called that?
8. Future vs Options. What are the differences between futures contracts and options?
9. Foreign Exchanged Instruments. Explain how foreign exchange instruments would be used by an investor to hedge currency risk.
10. Identify a publicly traded corporation that has at least two different classes of equity and investigate the firm to answer the following questions :
a. How do the diffent classes vary in term of risk, return and control?
b. Which class of shares was the originaltype of shares? Why do you think other classes were issued?
c. Identify bonds issues by the firm. What are the coupon rates, maturities dates and credit ratings of those bonds?
d. Are options traded on the stocks? What are the charateristics of these options?

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