Question

1. Your boss wants you to provide an evaluation of the following:

   • Proprietorship, partnership, corporation, charter, and bylaws
   • Limited Partnership, limited liability partnership, and professional corporation
   • Stockholder wealth maximize market, and capital market maximization
   • Money market, capital market, primary market, and secondary market
   • Private market, public market, and derivatives
   • Investment bank: financial services corporation, and financial intermediary
   • Mutual fund, and money market fund
   • Physical location exchange, computer/telephone network
   • Open outcry auction and dealer market automated trading platform
   • Production opportunities and time preferences for consumption
   • Foreign trade deficit
     • Your target audience should be your direct supervisor or management team. Explain each of these topics in broad terms.
     • Please provide speaker notes100+ words

Answer 1

• Proprietorship, partnership, corporation, charter, and bylaws: Proprietorship refers to organisation which is held by a single individual.In partnership, there are at least two people, in corporation, there are multiple persons also it is recognised as body corporate, charter means statement by a country to its people whereas bylaws are regulations made by local corporation.
• Limited Partnership, limited liability partnership, and professional corporation: Limited Partnership is a partnership has a general partner , who is responsible for the business and has unlimited personal liability for all the debts & liabilities of the Limited Liaibility Partnership,has a limited partner, who has limited liability but cannot participate in management.A professional corportation is a corporation which regulates the profession of accountants, attorneys, lawyers etc
• Stockholder wealth maximize market, and capital market maximization: when a stock price increases there is capital gain to the stock holder plus the dividend received on that stock. Both lead to wealth maximization of stockholder whereas capital market maximization refers to increase in the market capitalisation of all the companies on the capital market.
• Money market, capital market, primary market, and secondary market: Money market is used by the bank & individuals for short term financing needs, capital markets are markets for long term wealth creation. Primary market are the markets for initial public offering, secondary market is market where actual trading place between already listed scrips.
• Private market, public market, and derivatives: Private market refers to private placement of shares or debentures to the specific investor. Public market refers to general market for mass participation of investors. Derivatives refers to instruments which derive their value from the change in value of underlying asset.
• Investment bank: financial services corporation, and financial intermediary: Investment banks offers many services like raising of capital, post issue subscription,underwriting, merchant banking services to the companies. Financial services corporation provides short term and long term financing needs to individuals and companies. Financial intermediary is generally the broker which is the bridge between the investor and the market.
• Mutual fund, and money market fund: Mutual funds are pool of funds of a lot of investors. These funds can be invested in equity, debt, money market, according to the fund category and regulatory requirements whereas money market fund is solely based on the money market instruments only
• Physical location exchange, computer/telephone network: Physical location exchange or over the counter exchange refers to the exchange where the investor needs to interact over the counter with the financial market depository for any transaction. Computer / Telephone network refer to the network in which the transactions can happen over the internet through the intermediary in the market.
• Open outcry auction and dealer market automated trading platform: Open outcry is the communication between the traders and dealer in the trading floor whereas dealer market automated trading platform provides for automated communications of the order to different traders thereby processing the orders fast and simultaneously.
• Production opportunities and time preferences for consumption: Production opportunity refer to the buying of the stock by the investor in order to make some capital gains. Time preference for consumption among consumers refer to the prerogative of the consumers to spend their money on different consumption alternatives at different time.
• Foreign trade deficit: Foreign trade deficit occurs when the country's exports are lesser than the country's imports. Under such circumstances, the country needs to shell out more money than it earns on the exports thereby resulting in the trade deficit