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Organisations and the financial system

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Figure 5 shows the three key stages of an asset trading in the financial markets. Each stage is indicated by a tab. The first tab, titled ‘Stock or bond issuance’, reads: ‘The company issues a stock or a bond’. The second tab, titled ‘The primary market’, reads: ‘The new financial asset is put on exchange’. The third tab, titled ‘The secondary market’, reads: ‘The financial asset previously issued is traded between investors’.

 3.1 The stock and bond markets