Question

1. Explain the difference between primary, secondary markets. Then tell me when did American Express UK go public, at what price and where does it trade now? Include at least 1 live link.

2.Identify each of the categories included on the Statement of Cash Flows and give 2 examples of the type of transaction that American Express does/can do in relation to each of your examples and category.

Answer 1

1) Difference between Primary and Secondary Market
Basis	Primary Market	Secondary Market
Meaning	This is the market where companies issued	Secondar Market is the Stock Market, where stock
	their stock and bond first time to the public.	as issued as IPO in primary market got listed and
	For example IPO.	traded in stock exchange thereafter
Method of	Investor purchase stock or bond directly from	Investor purchase stock or bond indirectly through
Transaction	company through broker	stock market
Object of finance	It help to the existing company for expansion	It does not help to existing company as traded
	and diversification	between the investors
Transaction	Once	Many times
frequency
Source of finance	Company receive the inflow	Investors receive the inflow
comes to
2) Cash Flow Statement with the example as suitable for American expresss
(i) Cashflow from operating Activities
Receipts from cardholder	+
Payment to suppliers for cost of services of	-
cards maintenance
(ii) Cashflow from Investing Activities
Capital Investment (Addition in fixed assets)	-
Income from Investment	+
(iii) Cashflow from Financing Activities
Share issued	+
Repayment of loan	-