Describe the two ways whereby capital market securities pass from the issuer to the public.

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Describe the two ways whereby capital market securities pass from the issuer to the public.



Answer: Capital market securities may be sold in a public offering or in a private placement. In a public offering, investment bankers register the security with the SEC and market it through a network of brokerage houses. In a private placement, the firm or an investment banker sells the securities to a very limited number of investors, who each buy a large quantity.

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