Chapter 05 w Learning Obj

Chapter 05 w Learning Obj - Chapter 5 Financial Markets and...

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    5-1 Chapter 5 - Financial Markets and Institutions Learning Objectives After reading this chapter, students should be able to: Describe three ways in which the transfer of capital takes place. List some of the many different types of financial markets, and identify  several recent trends taking place in the financial markets. Identify some of the most important money and capital market  instruments, and list the characteristics of each. Compare and contrast major financial institutions. Distinguish between the two basic types of stock markets. Identify the three classifications of stock market transactions. Read stock quotations from a variety of sources/publications. Briefly explain the Efficient Markets Hypothesis (EMH), identify the  three levels of efficiency, and discuss the implications of market  efficiency. Briefly discuss behavioral finance and its impact on the support for  EMH.
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    5-2 CHAPTER 5 Financial Markets and Institutions The Capital Allocation Process Financial markets Financial institutions Stock Markets and Returns Stock Market Efficiency
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    5-3 The Capital Allocation  Process In a well-functioning economy, capital flows efficiently  from those who supply capital to those who demand  it. Suppliers of capital – individuals and institutions with  “excess funds”.  These groups are saving money and  looking for a rate of return on their investment. Demanders or users of capital – individuals and  institutions who need to raise funds to finance their  investment opportunities.  These groups are willing to  pay a rate of return on the capital they borrow.
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  5-4 How is capital transferred between  savers and borrowers? Direct transfers
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Chapter 05 w Learning Obj - Chapter 5 Financial Markets and...

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