Question

Explicate 2 different types of orders such as limit and stop limit ones

Explain the underwriting function of an investment banker

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

Explain Private placements.

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

Answer 1

Limit order: It is defined as an investor will put limit on stock price depending upon he position hee want to take. For buyer investor pt limit n stock price that after teh reaching on certain price, his position should be executed an vice versa for seller investor. For example, if google stack price is trading at $10 and buyer investor want to purchase at $18 then when stock reach at $18 then system will automatically execute he position, means system will buy the stok for investor. For seller investor, want to sell the stock at $20, then when stock price reach then system will sell the stock.

Stop Limit order: It defined as investor can limit its loss. For exampe, google stock price currently trading at $19, buyer has holding the stock at $19.50 but want that if stock will trade less than $18.90 then system should automatically sell the share. Buyer ready to take loss of $0.6 per stock but not more than that.

Underwriting function of an investment banker is that investor banker will raise fund for any coorporate or government by fixing at certain price of bond, equity or securities. The word "underwriter" means the practice of having each risk-taker write his name under the total amount of risk he was willing to accept at a specified premium. For example, wen the stock price is traded first time in equity market and company come with Intiail public offer then investment banker advertise about IPO and distribute risk to applicant to absorb the risk for company future earning.

Governement in contract means that government is taking any action which is not benefit to government but to large public. For example, susidary furnish by government. While Self regulation means government is making monopoly of his power. Such as having decision that tax to be increase from 10% to 100%.

Private placement is another type of function of investment banker in which investor sell the securities, equit to private investors instead to public. Private investor can be individual, government or High net individual etc.