ch 1 - CHAPTER 1 The Role of Financial Markets and...

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1 CHAPTER 1 The Role of Financial Markets and Institutions
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2 A. Overview of Financial Markets Three Types of Financial Markets a. Money vs. Capital Markets b. Primary vs. Secondary Markets c. Organized vs. Over-the-Counter Markets
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3 A. Overview of Financial Markets Participants that provide funds are called surplus units households Participants that enter markets to obtain funds are deficit units government
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4 A.Overview of Financial Markets Securities Traded in Financial Markets Money Market Securities Capital Market Securities 1) Bonds and Mortgages 2) Stocks Derivative Securities 1) Speculation using an underlying asset 2) Acts as Risk Management – a form of hedging
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5 B. Valuation of Securities in Financial Markets Market Pricing of Securities Impacted by : Information on Valuations (top-down approach) Economic conditions Industry conditions Firm-specific effects
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6 B. Valuation of Securities in Financial Markets
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7 B. Valuation of Securities in
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This document was uploaded on 11/29/2009.

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ch 1 - CHAPTER 1 The Role of Financial Markets and...

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