Page 163 - Bus101FlipBook

CH 9] Business 101 9-11

New York Stock Exchange
New York, New York

Secondary Market Exchanges
Securities exchanges are the marketplaces for stocks and bonds. At a stock
exchange, stocks and bonds are bought and sold. Although corporations' securities are
traded, the corporations are not directly involved, and they receive no proceeds from stock exchange
Location at which stocks
the sales. The securities traded at organized exchanges have already been issued by and bonds are bought
corporations. Then sales occur between individuals and corporate investors. and sold.

The New York Stock Exchange (NYSE)
When investors talk about the stock market, they are usually referring to the New
York Stock Exchange. Even though the Japan Stock Exchange has challenged the
NYSE in recent years, the "Big Board," as it is sometimes called, is the largest and
best known of all stock exchanges. Only one out of every 1,000 American
corporations qualify for listing on this exchange, but these firms account for more than
40 percent of the assets held by all U.S. companies.
A brokerage firm must be a member of the NYSE to transact business there. The
exchange has 1,366 "seats"; potential members must purchase seats from current
members and be approved by the exchange. Memberships have varied considerably in
price, ranging from a high of $4 million to a low of $4,000.
In excess of 2,400 issues of common stock, less than 600 issues of preferred stock,
and 3,300 bonds are listed, or traded, on the NYSE. These securities represent 86
percent of the market value of all outstanding stocks and corporate bonds in the United
States. NYSE‑listed stocks include such major corporations as RCA, Exxon/Mobil
Oil, Du Pont, Xerox, and Boeing. Such foreign stocks as Seagram Co. (Canada), KLM
Royal Dutch Airlines (Netherlands), Sony (Japan), and ASA Limited (South Africa),
and Massey-Ferguson (Canada) are also listed.
9

Table 9.2 Investment Objectives of Securities

Investment Objective
Security Safety Income Growth
Bonds Best Very steady Usually none
Preferred Stocks Good Steady Variable
Common Stocks Least Variable Best

Copyrighted Material