You probably have heard a lot about the stock exchange – a place where brokers trade various securities including bonds and stocks. Its also where securities are issued and redeemed. Other items traded on the stock exchange along with stocks include derivatives and unit trusts. To trade on an individual stock exchange you are required to be a member. What many people don’t know is that mortgages play a part in stocks and bonds.

There are two types of offerings to investors – stocks and bonds on the primary market (usually the initial offering) and the secondary market. The economic function of supply and demand is at work here.… Read the rest