contabilidad
The Financial Environment: Markets, Institutions, and Interest Rates
After reading this chapter, students should be able to:
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.
Describe three ways in which the transfer of capital takes place.
Compare and contrast major financial institutions.
Distinguish between the two basic types of stock markets.
Explain how capital is allocated in a supply/demand framework, and list the fundamental factors that affect the cost of money.
Write out two equations for the nominal, or quoted, interest rate, and briefly discuss each component.
Define what is meant by the term structure of interest rates, and graph a yield curve for a given set of data.
Explain the two key factors that determine the shape of the yield curve.
Discuss country risk.
List four additional factors that influence the level of interest rates and the slope of the yield curve.
Briefly explain how interest rate levels affect business decisions.
The Financial Markets
Financial Market: An organized institutional structure or mechanism for creating and exchanging financial assets.
Money Markets: Markets for debt securities with maturities of one year or less. Treasury bills, repurchase agreements, banker’s acceptances, commercial paper, negotiable CD’s, money market funds and Eurodollar deposits.
Capital Markets: The markets for long-term debt (corporate, state, local and federal government) and corporate stock (common and preferred). U.S. Treasury notes and bonds, municipal bonds, mortgages, corporate bonds, preferred stock and common stock.
Primary Markets: The first buyer of a newly issued security buys that security in the primary market. All subsequent trading of those securities is done in the secondary
After reading this chapter, students should be able to:
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.
Describe three ways in which the transfer of capital takes place.
Compare and contrast major financial institutions.
Distinguish between the two basic types of stock markets.
Explain how capital is allocated in a supply/demand framework, and list the fundamental factors that affect the cost of money.
Write out two equations for the nominal, or quoted, interest rate, and briefly discuss each component.
Define what is meant by the term structure of interest rates, and graph a yield curve for a given set of data.
Explain the two key factors that determine the shape of the yield curve.
Discuss country risk.
List four additional factors that influence the level of interest rates and the slope of the yield curve.
Briefly explain how interest rate levels affect business decisions.
The Financial Markets
Financial Market: An organized institutional structure or mechanism for creating and exchanging financial assets.
Money Markets: Markets for debt securities with maturities of one year or less. Treasury bills, repurchase agreements, banker’s acceptances, commercial paper, negotiable CD’s, money market funds and Eurodollar deposits.
Capital Markets: The markets for long-term debt (corporate, state, local and federal government) and corporate stock (common and preferred). U.S. Treasury notes and bonds, municipal bonds, mortgages, corporate bonds, preferred stock and common stock.
Primary Markets: The first buyer of a newly issued security buys that security in the primary market. All subsequent trading of those securities is done in the secondary