Profiles In American Enterprise

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Profiles In American Enterprise

A.G. Edwards Inc.    

    The industry for securities is undoubtedly an exciting and fast paced
industry. This means that brokerage firms such as A.G. Edwards and Sons
must always be watching the stock prices on every stock in the market so
that they can give their clients maximum profit. When A.G. Edwards and
Sons’ clients do well then in turn so does the brokerage firm. A.G.
Edwards Inc. is not the biggest corporations in America, but yet it is
still a very large corporation and has great importance in the industry
for which it participates. This paper will give an in depth explanation
about how A.G. Edwards functions as a cor-poration.
    Along with competition from the government, banks and other brokerage
firms there is also probably the biggest factor involved of interest
rates. Interest rates are indi-rectly proportional to the activity in
the stock market. This means that when the interest rates fall the
market for securities becomes active. This is due to the fact that
people want the highest yield on there money and when interest rates are
low, investing money into a bank would yield less money then it would
have before at a higher interest rate. So people tend to want to put
there money into something that will give them a higher yield and stocks
are just that.
An example of this inversely proportional relationship is always being
demon-strated and was demonstrated in the past few years. At the end of
1992 to the beginning of 1993 the volume in most businesses was at
record levels obtaining a pre-tax net income for the whole industry of
9.1 billion dollars setting a new record for the second year in a row
(Hoover’s Company & Industry Database, 1993, p. 1 (Hoover, 1993,p.1)).
This trend continued when in the beginning half of 1993 offerings (new
business for the com-pany) exceeded those of 1992 (Hoover,1993, p. 2).
Examples of this are as follows; more than 700 billion dollars of debt
was issued in 1992 and then in the first half of 1993 an-other 440
billion dollars of debt was issued (Hoover, 1993, p. 2). More than half
of this debt was due to asset-backed debt such as credit cards and other
charges made to credit (Hoover, 1993, p. 2). These debts were included
because the debts were more or less sold to banks and other money
lending institutions who were more willing to take the risk for the high
interest rate.
This drop in interest rates did wonders for the br

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