Capital Markets And The Investment Banking Process

Investment banks provide a wealth of critical services to our economy. One important role of the investment bank is to assist public and private corporations in raising funds in the capital markets. A second service is in providing strategic advisory services for mergers, acquisitions and other types of financial transactions. They also act as intermediaries in trading for clients. Investment banks differ from commercial banks, which take deposits and make commercial and retail loans. The focus of this paper will be to describe the investment banking process including the function of portfolio construction. To better understand the investment banks role it is important to distinguish between what is known as the primary and secondary markets. Secondary markets are defined as ? markets for existing assets that are currently traded between investors? (Hirt and Block, 2006). The secondary markets are important because they create prices and provide liquidity. Without secondary markets......