lecture Notes 2 - Financial Environment

lecture Notes 2 - Financial Environment - Lecture Notes 2...

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Lecture Notes 2 The Financial Environment
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A classification of assets Real Assets: Tangible, physical assets Financial Assets: Stocks, Bonds etc. claims on cash flow produced by underlying real assets
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Markets Money markets Short term, marketable, liquid securities Capital Markets Longer-term securities
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Money Market Instruments T-bills Negotiable CDs Bankers’ Acceptances Eurodollar deposits Repos and Reverses Federal Funds Brokers’ Calls LIBOR
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Fixed Income Capital Market T- Notes and Bonds Federal Agency Debt Municipal securities Corporate Bonds Mortgage-Backed securities
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Equity Markets Organized exchanges NYSE AMEX Regional exchanges OTC market: NASDAQ Third Market Fourth Market Instinet
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Margin Purchases Suppose you buy 100 shares of a stock priced at $50 Initial Margin requirement is 50% Maintenance Margin is 30%
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Margin Definition Margin Shares of Value Equity =
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lecture Notes 2 - Financial Environment - Lecture Notes 2...

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