Write A Minimum Of 175 Words You Are A New Operations Manage
Write A Minimum 175 Wordsyou Are A Newoperations Managerfor A Major Fi
Write a minimum 175 words. You are a new operations manager for a major financial institution, and you’ve been invited to speak as a guest lecturer for a freshman finance course at the local university. Explain to the class what you consider to be a top mechanic of a primary market and a top mechanic of a secondary market. How would you explain the way the performance of your company is influenced by the activity of the markets you described?
Paper For Above instruction
As a new operations manager at a leading financial institution, I am excited to share insights into how markets influence our company's performance. Understanding the mechanics of primary and secondary markets is crucial for grasping the dynamics of financial operations.
The primary market is where new securities are issued directly by companies or governments to investors. One top mechanic of this market is the process of initial public offerings (IPOs). During an IPO, a company offers its shares to the public for the first time, raising capital to fund growth or pay debts. This process is vital because it determines the influx of new funds into the economy and impacts investor confidence. When the primary market is active and successful, our institution benefits from increased underwriting and advisory services, which can enhance revenue streams.
Conversely, the secondary market involves the buying and selling of existing securities among investors. A key mechanic here is market liquidity, which refers to how easily securities can be traded without affecting their price. High liquidity typically indicates a robust secondary market, allowing investors to buy or sell assets swiftly. This activity influences our company's performance because high trading volume and liquidity can lead to better asset management and investment opportunities, fostering client trust and profitability.
The activity in these markets directly affects our company's operations. For instance, a vibrant primary market can lead to more new securities issuance, increasing the demand for our underwriting services. Simultaneously, strong secondary markets mean that investors are active and confident, which can lead to increased asset management opportunities for us. Market fluctuations, driven by economic indicators and investor sentiment, impact the valuation of assets and the risk environment, influencing our strategic decisions.
In conclusion, understanding how the primary and secondary markets operate helps us anticipate market trends, optimize our services, and improve our company's overall performance. As market activity accelerates, so do the opportunities for growth and success within our financial institution, making market mechanics a fundamental aspect of our strategic planning.
References
- Bodie, Z., Kane, A., & Marcus, A. J. (2014). Investments (10th ed.). McGraw-Hill Education.
- Mankiw, N. G. (2018). Principles of Economics (8th ed.). Cengage Learning.
- Fabozzi, F. J. (2018). Bond Markets, Analysis and Strategies (10th ed.). Pearson.
- Mishkin, F. S., & Eakins, S. G. (2018). Financial Markets and Institutions (9th ed.). Pearson.
- Fabozzi, F. J., & Modigliani, F. (2003). Capital Markets: Institutions and Instruments. MIT Press.
- Tirole, J. (2010). The Theory of Corporate Finance. Princeton University Press.
- Eling, M., & Schäfer, D. (2018). Risk management in financial institutions. Springer.
- Saunders, A., & Allen, L. (2020). Credit Risk Management In and Out of the Financial Crisis. Wiley.
- Lintner, J. (1965). The valuation of risk assets and the selection of risky investments in stock portfolios and capital budgets. The Review of Economics and Statistics, 47(1), 13-37.
- Sharpe, W. F. (1964). Capital asset prices: A theory of market equilibrium under conditions of risk. The Journal of Finance, 19(3), 425–442.