What are the key differences between private markets and public markets as described in the chapter?

Private markets involve transactions negotiated directly between two parties, while public markets consist of standardized contracts traded on organized exchanges. Private market examples include bank loans and private debt placements, whereas public markets involve securities like common stocks and corporate bonds that are held by a large number of investors.

In private markets, the terms of transactions can be customized based on the agreement between the involved parties, allowing for flexibility. In contrast, public markets require standardized contracts to accommodate a broad base of investors who may lack the expertise to negotiate unique terms. This standardization contributes to greater liquidity in public markets compared to private markets, where securities are often uniquely negotiated and less liquid.