2. Located at 11 Wall Street in lower Manhattan, NY City.
It’s by far the world’s largest stock exchange.
3. It’s a market place that allows people to buy and sell
financial:
Securities (shares and bonds)
Commodities (gold, silver, copper)
Currencies (euro, dollar)
Financial markets are typically defined by having
transparent pricing, basic regulations on trading, costs
and fees.
4. Financial markets allow :
The raising of capital
The transfer of risk
The transfer of liquidity
5. Capital market which includes the stock market and the bond market
Commodity market which contains precious metal and agricultural
Money market
6. Allowing buyers and sellers of stocks to meet
Raising capital for businesses
Sharing the profit
7. Bond: it’s a share of loan, companies can raise money by issuing bonds. They
will have to pay an interest and pay back the bondholders.
Capital Stock: it’s the money invested in the business by its founders.
Put very simply, stocks offer an ownership stake in the
company and bonds are akin to loans made to the
company.
8. People buy shares because they think that the value of
factory will increase and so the value of its shares.
They will have a dividend each year.
They can buy shares at a low price and sell them at a
higher price.
9. As people buy and sell shares, stock prices can change
everyday.
When there is more buying, the stock prices rise.
When there is more selling, the stock prices fall.
So, stock prices change due to the imbalance between
buyers and sellers.
10. We measure the stock market with an index :
- CAC 40
- Dow Jones
- S&P 500
It’s an average of a specific group of stock prices.
11. We can conclude that stock exchanges have multiple
roles in the economy:
- Raising capital for businesses
- Mobilizing savings for investment
- Facilitating company growth
- Creating investment opportunities for small investors
- Government capital-raising for development projects
- It’s a barometer for the economy
