Most business organizations are financed by debt capital and equity contribution of its shareholders. The company raises its equity capital by new share issues and by means of retained earnings which are plough back for future dividends and earning growths. New shares may be offered for sales to members of the public who are invited to subscribe or to existing share holders who are invited to apply for additional shares. The financial market is that market where companies or firms raises needed funds for their on-going operations as well as for long term capital expenditures.
These firms, may also temporarily place its surplus in quick yielding short term investments until its final disposition. This market is the mechanism that exist in order to facilitate the exchange of financial assets. The market functions effectively with the activities of financial intermediaries that issues financial claims against themselves. This means that they sell financial assets representing claims on themselves in return for cash. In disclosing the operations of the market, it is pertinent to reveal how an investor should go about making decisions on marketable securities in which to invest, how extensive the investment should be and when the investment should be made, this research work is aimed at revealing the secrets of sound investment. Investors and members of the financial market will find this work very useful.
1.2 STATEMENT OF THE PROBLEM
The joy that is associated with successful investment is always applauded with great financial returns. Investors are generally confronted with the problem of returns. There is always differences in their expected return and what turns out to be the actual return in investments held by them. Hence, within the confines of the Nigerian financial market, the following difficulties arises. How are securities bought and sold? How do investors take decisions about marketable securities in which to invest? How should seasoned Investors go about minimizing the problems of risk held in their investment? All these issues are to be addressed in the plight of this work.