Financial Management
Financial Management
This document placed forward is to aid in the explanation of the nature of the Jamaican financial markets to Valentino Rossi, a professional motorcyclist who recently came to the Jamaica from Italy. Valentino is a highly ranked cyclist who expects to invest substantial amounts of money through the Jamaica Money Market Brokers. He is keen on financial matters and would like to understand in general terms what will happen to his money. So a set of questions and scenarios have been used to better to explain the Jamaican financial system to Valentino by the consultancy team of JMMB.
What are the three primary ways in which capital is transferred between savers and borrowers?
Capital may be defined as the money, property, and other valuables which collectively represent the wealth of an individual or business. Capital can be transferred by 3 primary methods, which are by: (1) Direct Transfer (2) Investment Banking House (3) Financial Intermediary
Direct Transfer
A Direct Transfer is where a business sells its stocks or bonds directly to investors (savers), without going through any type of institution. The business borrower receives dollars from the savers, and the savers receive securities in the form of bonds or stock in return
Investment Banking House
If the Investment Banking House method is used to transfer capital, an investment bank serves as a middleman. The business sells its securities to the investment bank, which will in turn sell the securities to the savers. Although the securities are sold twice, the two sales constitute one complete transaction in the primary market.
Financial Intermediary
In the Financial Intermediary method of Capital transfer savers invest funds with a intermediary, which then issues its own securities in exchange. Banks are one type of intermediary, receiving dollars from many small savers and then lending these dollars to borrowers to conduct various financial
This document placed forward is to aid in the explanation of the nature of the Jamaican financial markets to Valentino Rossi, a professional motorcyclist who recently came to the Jamaica from Italy. Valentino is a highly ranked cyclist who expects to invest substantial amounts of money through the Jamaica Money Market Brokers. He is keen on financial matters and would like to understand in general terms what will happen to his money. So a set of questions and scenarios have been used to better to explain the Jamaican financial system to Valentino by the consultancy team of JMMB.
What are the three primary ways in which capital is transferred between savers and borrowers?
Capital may be defined as the money, property, and other valuables which collectively represent the wealth of an individual or business. Capital can be transferred by 3 primary methods, which are by: (1) Direct Transfer (2) Investment Banking House (3) Financial Intermediary
Direct Transfer
A Direct Transfer is where a business sells its stocks or bonds directly to investors (savers), without going through any type of institution. The business borrower receives dollars from the savers, and the savers receive securities in the form of bonds or stock in return
Investment Banking House
If the Investment Banking House method is used to transfer capital, an investment bank serves as a middleman. The business sells its securities to the investment bank, which will in turn sell the securities to the savers. Although the securities are sold twice, the two sales constitute one complete transaction in the primary market.
Financial Intermediary
In the Financial Intermediary method of Capital transfer savers invest funds with a intermediary, which then issues its own securities in exchange. Banks are one type of intermediary, receiving dollars from many small savers and then lending these dollars to borrowers to conduct various financial
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