Question

Which of the following individuals can begin selling securities?

Answer 1

Individuals from firms can begin selling securities through an IPO. Financial investors, firms in the financial market, and mutual funds also sell securities, all under the regulation of bodies like the SEC.

Step-by-step explanation:

Individuals who want to begin selling securities must first understand that the securities market is highly regulated. Typically, individuals within a firm can begin selling their securities through an initial public offering (IPO), where a company sells its stocks to the public for the first time. This includes individuals, mutual funds, insurance companies, and pension funds. Once the firm's securities are publicly traded, financial investors can sell and resell stocks and bonds to one another. Furthermore, regulatory bodies like the Securities and Exchange Commission supervise the sale of securities to ensure legal standards for disclosure and fair trading practices.

Firms in the financial market, including banks, venture capitalists, and angel investors, also participate in selling securities. They provide the necessary capital to companies, thereby receiving securities that they can later sell. Moreover, mutual funds play a significant role in the financial market by combining the stocks and bonds of many different companies, providing diversified investment opportunities to individuals and institutions.

Answer 2

Firms in the financial market can begin selling securities during an IPO, while households in the financial market sell securities they own. The sale of securities is regulated by the SEC, which enforces the Federal Securities Act.

Step-by-step explanation:

Individuals who can begin selling securities include firms in the financial market, such as investment banks, which facilitate initial public offerings (IPOs), and households in the financial market, which may sell securities they already own. The Federal Securities Act and the establishment of the Securities and Exchange Commission (SEC) ensure that legal standards for the disclosure of information related to publicly traded securities are upheld, thus creating a secure environment for securities trading.

Firms that sell shares of stock and issue bonds to raise capital are directly involved in the sale of their own securities, especially during an IPO. Afterward, financial investors, such as mutual fund managers and individual traders, sell and resell stocks and bonds to one another in the secondary market. Venture capitalists and angel investors may also begin selling securities of the companies they have invested in once these companies go public.