ORQUIA, ANNDHREA S.

BSA-22

1. Give the meaning of Secondary Market.

Secondary Market is where investors buy and sell securities they already own. It is what most people
typically think of as the "stock market," though stocks are also sold on the primary market when they
are first issued. Any transactions on the secondary market occur between investors, and the proceeds
of each sale go to the selling investor, not to the company that issued the stock or to the underwriting
bank.

2. State the Essential Functions of Primary Markets

Key function of the primary market is to facilitate capital growth by enabling individuals to convert
savings into investments;
• Household Savings
• Global Investments
• Sale of Government Securities
• Primary Market Participants

3. Analyze then DISCUSS under safety instrument, the expected return for money market; why it is less
return while in capital market it is in high return?
Money market is less risker because it is short term lending system. which means that whenever you
wanted to get your money back from the institution you choose to place your investment will readily
give it to you and will be converted to cash. For example, of this is bank. Whenever you put your
money in the bank it is less risker why? Because whenever we wanted to get the money from the bank
we can easily withdraw it without any worries but on the other half of that the lower the risk the lower
the return. While the capital market has a high risk because the outcome earnings to this is based on
the health of the economy at large, the status of every industry in it. You will never know what will be
exactly happen for the future but all you know is it have positive mindset that which is the higher the
risk the higher the return.

4. Describe what is OTC (Over The Counter Market)

An over the counter security is traded through a dealer network rather than through a centralized,
formal exchange. Assets traded OTC are usually traded by private securities dealers who negotiate
directly with buyers and sellers. The primary reason a stock is traded "over the counter" is because the
company may be too small to meet the formal exchange listing requirements. OTC stocks may be
referred to as "unlisted stocks" because they are traded privately through broker-dealers over the
phone and computer networks. Over the counter securities are important because they offer investors
alternatives to just investing in the listed companies It also gives investors an great opportunity to
invest in stocks of small and/or overlooked companies that have plenty of growth potential.