Essay about The Integrity of Capital Markets - 1436 Words

Introduction Capital market is constituted of both primary and secondary markets all of which provide long-term investment opportunities. They are markets for long term funds with maturity period of more than one year. Examples of Financial instruments which are used in capital markets are debentures, terms, loans, bonds, warrants, preference shares and ordinary shares among others. These markets constitute of bond market and stock market in which debts and equity securities are traded respectively. Subsequently, capital market serves as a way of allocating the available capital to the most efficient users. Being an investment arena, capital markets usually are in constant control of immense amount of money which is usually contributed†¦show more content†¦For example through use of print media and radio, a large number can be accessed. Unethical business practices have been dominating the capital market environment thus leading to subsequent frustration of investors. For instance, delivery and channeling of sensitive market oriented information on biased bases has led to unexpected fluctuation of various market share prices in which shareholders expect dividend from. For example, cases have been reported where top management teams in a collapsing organization leak some such sensitive information to a small group of shareholder. As a consequence, the informed shareholders clear their shares through sale from the involved organization through adoption of a luring technique. This leaves the future investors at a state of dilemma accompanied with frustration and loss bearing the opportunities foregone (OBrien, 2007). Capital markets should uphold their integrity by acting independently through formulation of strategies an making of decision which are whatsoever not biased or discriminatory. Through this, it creates confidentiality and integrity of institution thus promoting future investments from investors. To maintain this, employees working in such institutions should always shun any state of dependency with either another corporate entity, supplier, segmented group of customers or evenShow MoreRelatedThere Are Major Decisions That Financial Advisors Have1083 Words   |  5 Pagesadvisors have to make in their daily lives. The first decision is investing decision which is capital budgeting decision. Capital budgeting is when a firm invests its funds in wanting fixed and current assets. This is a decision based on fixed assets taken. There are so many factors that affect investing capital budgeting like cash flow, return on investment, risks involved, and investment criteria. Capital budg eting has many important reasons such as long term growth, large amounts of funds involvedRead MoreIs Zipcar a High Potential Venture841 Words   |  4 PagesBased on Criteria’s of Evaluating Venture Opportunities there are several key indicators that shows that Zipcar is indeed a high potential venture. 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