Question

10.Explain the difference between governmental in contrast to self-regulation.

11. Explain the underwriting function of an investment banker

13. Expound on three different approaches of distributing shares initially to the public markets.

14. Describe and define the 4 diverse security markets.

15. what has happened to transactions costs of trades inter temporally? Is your money safe in a broker dealer?

Answer 1

(1): Governmental regulation is nothing but a natural extension of legislation. Government regulation defines and controls the ways (not all but some) in which a business entity or individuals can operate so that the law of the land is adhered to. For instance in many countries government regulation requires manufacturers of food items like potato chips, instant noodles etc. to display the nutritional fact in the package. In other words the package of the food product should give a breakup of nutritional facts like quantity of trans fats, of vitamins, of saturated fats, of proteins, of sugar etc.

On the other hand self-regulation is that system of regulation in which a business entity or individuals has complete control over how it wants to adhere to and meet the minimum legislative requirements. For instance self-regulation with regards to a kitchen of a restaurant will involve how the kitchen gets cleaned, how foods are stored etc. The management of the restaurant will have to adhere to the minimum legislative requirements of keeping the kitchen sanitary but how and to what extent the kitchen is kept clean and free from germs will be a part of self-regulation being done by the restaurant’s management.