Securities Brokerage Industry in the U.S.
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This research examines competition in the investment banking (securities brokerage) industry in the United States, as the competitive environment within the industry is defined by industry structure and the market behavior of the firms in the industry. Additionally, profitability performance within the industry, and the contribution of the industry to general economic growth are assessed. Operational Functions of Investment The major operational functions of investment banking firms are underwriting, dealing, brokerage, and the provision of financial advice (Pugel and White, 1985). The underwriting function involves origination, riskbearing, and distribution. Origination is concerned with defining the essential characteristics of an investment offering (debt or equity, pricing, timing, method of distribution, and so forth). Riskbearing on the part of an investment bank involves the purchase by a bank at a fixed price of a new securities issue, for eventual sale to the investing public (Pugel and White, 1985). In this context, the investment bank is at risk until the new issue is sold. Distribution is the act of selling the issue to the investing public. The provision of financial advice accompanies the underwriting function, although financial advice is also provided in other instances, such as, in conjunction with merger and acquisition decisions. Underwriting is most frequently considered in terms of corporate issues. The underwriting
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Banks ($ = billions)
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Investment Bank Net Profit Tax Rate BeforeTax Profit
(Market Rank) ($) (%)
$ % Revenues
Advest Group
1987 (10) .014 43.8 .025 10.9
1990 (11) .009 28.0 .023 10.9
Bear Stearns
1987 (5) .143 29.0 .493 26.1
1990 (5) .119 38.0 .313 13.1
Discount Corp.
1987 (9) .030 46.5 .065 23.5
1990 (8) .039 46.5 .839 24.2
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Investment Bank Net Profit Tax Rate BeforeTax Profit
(Market Rank) ($) (%)
$ % Revenues
A. G. Edwards
1987 (6) .036 36.3 .099 19.6
1990 (6) .059 36.0 .164 24.3
InterRegionalFinancial
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Some common words found in the essay are:
Pugel White, Rapping Pulley, Source White, Sources Butler, Merrill Lynch, York Times, Ownership Structure, Scope Scope, Market Rank, Capital Generation, investment banking, investment bank, | |, investment banking firms, banking firms, american investment, 1991c fischer, banking industry, pugel white 1985, white 1985, investment banking industry, pugel white, legg mason, | | |, investment bank operating,
Approximate Word count = 6684
Approximate Pages = 27 (250 words per page)
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