FINANCIALMKTSCLASS

FINANCIALMKTSCLASS - 1 Financial Markets and Instruments ...

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Unformatted text preview: 1 Financial Markets and Instruments ¡ Key Points ¢ Functions of Financial System ¢ Financial Instruments and Markets Regulation of the Financial 1 ¢ Regulation of the Financial System ¢ Changes in the Financial System ¢ Efficient Markets Hypothesis and Random Walk In the News? 2 Bernanke Deflation & Fed - 2002 ¡ Sustained deflation can be highly destructive to a modern economy and should be strongly resisted. ¡ …for the foreseeable future, the chances of a serious deflation in the U.S.appear remote ¡ a variety of policy responses are available should deflation appear to be taking hold. ¡ prevention of deflation is preferable to cure ¡ …far from helpless in the face of deflation, even should the federal funds rate hit its zero bound 3 2 Course Issues ¡ Online Midterm –Window from Tuesday 10/19 6pm thru Thursday 10/21 6pm 50 questions covering weeks 1-7 60 minutes – DO NOT POST QUESTIONS RE MIDTERM AFTER 6 pm Today ¡ Advising and Investment Game ¡ ODE 4 Financial advisor ¢ Broker/Dealer sponsorship ¢ Series 7 Stockbroker' s Exam, and the Series 66 Uniform Combined State Law Exam ¢ Training programs, build book, switch from salary to commission ¢ Sales, tech/financial knowledge (CFA, etc), people skilsl ¡ Management fee or commission 5 Selected HW – online? 6 3 Investment Game ¡ ¡ Investment Game 1, 2 7 What are the underlying economic functions of financial markets? 8 Why So Many Different Financial Instruments? ¡ Different Needs – Borrowers and Lenders ¢ Liquidity / Term ¢ Risk / yield ¡ Default and market risk 9 ¡ Default and market risk ¡ Current and yield to maturity ¢ Debt vs equity etc ¢ Legal restrictions ¢ Information issues ¡ Direct versus intermediaries 4 Classifying Financial Markets & Instruments ¡ Debt Markets ¡ Short-term (maturity < 1 year) Money Market ¡ Commercial paper, negotiable cds, treasury bills, repurchase agreements,...
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FINANCIALMKTSCLASS - 1 Financial Markets and Instruments ...

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