Business

You have been asked to write a report for a group of new stock brokers about the American Stock Exchange and the NASDAQ.

Visit both the American Stock Exchange (AMEX): http://www.amex.com, and the NASDAQ: http://www.nasdaq.com , and write a 2-3 page paper on how the two exchanges operate. Make sure to address the following three questions:

1. How are AMEX and NASDAQ similar, if at all?

Stock exchanges play major role in developing a vibrant market for corporate stocks. They provide the necessary platform for corporations to raise funds & for investors to invest in stocks of their preference. Both Amex and NASDAQ are similar in which they are both companies that are based on the stock market. Both handle major clients and many different exchanges. Both also deal with the buying and selling of stocks. Each is widely known and capitalizes on their investors.

Amex is better known as the American Stock Exchange. Amex is used by investors in the stock market to find a resource and understanding of an investment. Amex is used mostly by individuals but also by institutional investors. "Amex uses a wide variety of listed equities, an extensive options market, and an unrivaled listing of more than 100 exchange traded funds (ETFs), the securities category pioneered by the American Stock Exchange." (amex.com) NASDAQ is better known as National Association of Securities Dealers Automated Quotations System. It is a market where stocks are exchanged. It is mostly corporate exchanges and mainly deals with technology.

2. How are the two exchanges different from one another, if at all?

NASDAQ trades stock differently than other exchanges. There is no traditional "floor." Buyers and sellers don't yell out their requests or wave little pieces of paper. Instead, a computer network displays trades. Buyers can place bids and sellers can check prices from computer workstations. Many high-tech firms, including Microsoft, Intel, Sun, and Apple, prefer this method. They believe NASDAQ is faster and more flexible. Unlike other exchanges, NASDAQ is run by dealers, or stock brokers who sell directly and keep the difference between the price you sell and the one someone else buys. "The AMEX-style system, a lot of people believe, provides more efficient pricing," explains TLW Securities Steven Maurer, who develops trading software. "In a dealer market [like NASDAQ], pricing depends more on the number of dealers involved." The AMEX brand communicates an affordable, responsive, and responsible auction market, while the NASDAQ represents high technology in stock trading.

3. How has the Former WorldCom Inc. Chief Executive Bernard Ebber's case affected WorldCom Inc., and the Telecommunication industry? Explain. (Hint: You may visit each site's Press Room/Release for possible leads).

Bernard Ebbers became very wealthy from the rising price of his holdings in WorldCom's stock. However, shortly after the MCI