1.

The first method pf transferring capital between savers and borrowers is through direct transfer of
money and securities, in which a firm selling stocks or bonds goes directly to investors or savers without
going to any financial institution. The second method is to to use an investment banker as a middleman
and make an indirect transfer. The firm selling its stock or bonds to an investment bank which then sells
to savers. And lastly, is financial intermediary such as bank, insurance company, or mutual fund to make
an indirect transfer. This transaction gets cash from savers in return for securities, which an
intermediary will use to purchase and hold the corporation’s securities in the same way that the saver
would hold the intermediary securities. This result in the creation of new type of capital.

2. Because having a healthy economy is dependent on people’s ability to move cash efficiently from net
savers to business and people in need of funding without this transfer the economy would collapse. It
helps to efficiently direct the flow of savings and investment in the economy in ways that facilitate the
accumulation of capital and the production of goods and services.
3. Juan’s acquisition of 100 shares of apple’s newly issued common stock would be classified as main
market transaction. It is now a secondary market deal because Juan bought it from Mac and Co.
4. No. since even I Mr. Juan bought previous Apple stocks through a dealer. It would still be a secondary
market transaction because the stock has been sold to a dealer market and isn't a new common stock.
Therefore, wouldn't make a difference whether she bought it from a dealer.
5. Market efficiency allows investors to buy and sell equities with the knowledge that they are getting
fair pricing. A poor allocation of resources and economic stagnation will result from inefficient markets,
which will make investors scared to invest. Market efficiency is therefore unquestionably beneficial from
an economic perspective. There is what we called a "efficiency continuum," with certain stock markets
being highly efficient and others being highly inefficient, thus some stock prices may be more efficient
than others.
6. A. According to the highly efficient form EMH, the market price of this stock already considers all
information that is publicly available, hence, there are no profits to be earned on this stock as a result of
the recent FDA clearance. This information is already reflected in its price.
B. IPOs are not always well received. Even if you can spot aissue, it is frequently challenging to buy
shares in the original sale. The demand for shares at the offering price typically outpaces the supply of
shares issued in these transactions, which is known as oversubscription.