chapter 5 notes

chapter 5 notes - BUS 320 Chapter 5 Notes 1 Financial...

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1 BUS 320 Chapter 5 Notes
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2 Financial Managers Do not operate in a vacuum. Make decisions within large complex environment. It is crucial that they have a good understanding of this environment.
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3 Well Functioning Economy Capital must flow efficiently from those who have excess capital to those in need of capital. Globally, economic development is highly correlated with the level & efficiency of financial markets and institutions.
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4 Types of Financial Markets Money vs. Capital Markets Money involve capital with maturies of 12 months or less Capital involve capital with maturies of more than 12 months. Primary vs Secondary Markets Primary-Deals with new issues Secondary-deals with previously issued securities.
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5 Stock Market Efficiency Efficient Markets Hypothesis Stocks are always in equilibrium. It is impossible for an investor to consistently beat the market. Prices adjust almost immediately to any new
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chapter 5 notes - BUS 320 Chapter 5 Notes 1 Financial...

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