Question 3

a. Explain five (5) roles that the stock market play in mobilizing capital for firms and providing liquidity for investors.

b. Three are several factors that a company may consider in its decision to issue public equity: Examine four (4) advantages and four (4) disadvantages of an initial public offering (IPO)

c. Stock market indexes are measures of the price performance of stock portfolios, which are formed to represent a stock market as a whole or a specific segment of the market, or sub- indexes.

i. Describe how the following indexes measures the price performance:

- Price weighted index

- Value weighted index

- Unweighted index

ii. Outline four (4) uses of indexes in measuring market performances.