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

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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