im-02-4e - CHAPTER TWO FINANCIAL MARKETS AND INSTRUMENTS...

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CHAPTER TWO FINANCIAL MARKETS AND INSTRUMENTS CHAPTER OVERVIEW This chapter describes the financial instruments traded in the primary and secondary markets. The various market indexes that are used as indicators of "the market" are also described. The chapter concludes with a discussion of options and futures. LEARNING OBJECTIVES Upon completion of this chapter the student should have a thorough understanding of the various financial instruments available to the potential investor. The student should have an insight as to the interpretation, composition, and calculation process involved in the various market indexes presented on the evening news. Finally, the student should have some understanding of the basics of options and futures contracts. PRESENTATION OF MATERIAL 1. Markets and Instruments An overview of the various financial instruments is displayed in T 2-1. Discussion of the major classes serves as a base for the discussion of the chapter material. T 2-2 Major Classes of Financial Assets or Securities The basic distinction between money and capital markets is then discussed. It is useful to discuss how the various classes of financial assets fit into the classification of the money market and capital market. Specifically, it is useful to describe examples of derivative securities that fit in both the capital and money markets. T 2-3 Markets and Instruments 2. Money Market Instruments The major money market instruments that are discussed in the text are presented in T 2-4. In describing the individual instruments it is helpful for the students understanding of the market to integrate
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This note was uploaded on 10/28/2009 for the course MBA MBA608 taught by Professor Martin during the Spring '09 term at Beirut Arab University.

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im-02-4e - CHAPTER TWO FINANCIAL MARKETS AND INSTRUMENTS...

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