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Meaning, Function, and Importance of the Investment Banker, Stock...

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Meaning, Function, and Importance of the Investment Banker, Stock Market,

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  • October 2010
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Investment Banker
The importance of an investment banker is what they do. They are important because of the services they provide to the economy. They advise for financial transactions such as mergers and acquisitions for companies. When a corporation sells new securities to raise funds, the agent is responsible for finding buyers for these securities. The investment banker purchases securities from corporation and arranges immediate resell of these securities to the investors. For example, Merrill Lynch & Co. and Goldman Sachs are some examples of well-known investment banking firms. Generally, investment bankers investigate, analyze, research, underwrite and distribute. Mostly, an investment banker performs all of these functions, though some investment bankers are specialized in certain areas. Investment banking helps businesses with raising funds. It provides investment opportunities to the individuals or groups. Most of the businesses and corporations get advisory services from the investment banker regarding mergers, acquisitions and divestiture. In addition, because of the importance of the roles of investment banking, the commercial banks do not perform these roles. Stock Market

A stock market is a public market for the trading of company stock or shares. The market function is where companies can raise funds for their business by issuing shares to investors. Also, where the investors can buy and/or sell these shares. Companies benefit from this because, market values for their shares are high, and they will be able to raise additional capital if they need to. Stock market is an important part of the economy of a country. The stock market plays a play a vital role in the growth of the industry and trade in their area. The reason is that the government, industry and even the central banks of the country keep a close watch on the happenings of the stock market. The stock market is important from both the industry’s and investor’s point of view....