finance reviewer - midterm
Types of Market
1. Physical asset markets (also called “tangible” or “real” asset markets) vs Financial asset markets – Physical asset markers are for products such as wheat, autos, real estate etc. Financial asset market deals with stocks, bonds, notes and mortgages.
2. Spot Market vs Future Markets – Spot markets are markets in which assets are bought or sold on the spot. Future Markets are markets in which participants agree today to buy or sell an asset at some future date.
3. Money markets vs Capital market – Money markets are short term, highly liquid debt securities. Capital markets are for intermediate or long term debt and corporate stocks.
4. Primary markets vs secondary markets – Primary are which corporates raise new capital. Secondary, which securities and other financial assets are traded among ivestors after they have been issued by corporations.
5. Private vs Public Markets – Private Markets, which transactions are worked out directly between 2 parties. Public Markets, which standardized contracts are traded on organized exchanges.s
CAPITAL MARKET
Capital Markets
A component of financial markets where long-term borrowing takes place
Are markets for buying and selling equity and debt instruments
The Market where investment instruments like bonds and equities are traded
(Maturity period) Lasts for more than 1 year and can also include life-time of a company
New York Stock Exchange or NYSE is the most popular capital market
It channel savings and investments between suppliers of capital (such as retail investors and institutional investors) and users of capital (like business, government and individuals)
Suppliers of Capital Markets – Generally want the maximum possible return at the lowest possible risk
Major Suppliers of funds in capital markets:
Commercial Banks (accepting banks deposits from customers, raising capital from investors or lenders and they use money to get loan)
Insurance Companies (creating value by pooling and
1. Physical asset markets (also called “tangible” or “real” asset markets) vs Financial asset markets – Physical asset markers are for products such as wheat, autos, real estate etc. Financial asset market deals with stocks, bonds, notes and mortgages.
2. Spot Market vs Future Markets – Spot markets are markets in which assets are bought or sold on the spot. Future Markets are markets in which participants agree today to buy or sell an asset at some future date.
3. Money markets vs Capital market – Money markets are short term, highly liquid debt securities. Capital markets are for intermediate or long term debt and corporate stocks.
4. Primary markets vs secondary markets – Primary are which corporates raise new capital. Secondary, which securities and other financial assets are traded among ivestors after they have been issued by corporations.
5. Private vs Public Markets – Private Markets, which transactions are worked out directly between 2 parties. Public Markets, which standardized contracts are traded on organized exchanges.s
CAPITAL MARKET
Capital Markets
A component of financial markets where long-term borrowing takes place
Are markets for buying and selling equity and debt instruments
The Market where investment instruments like bonds and equities are traded
(Maturity period) Lasts for more than 1 year and can also include life-time of a company
New York Stock Exchange or NYSE is the most popular capital market
It channel savings and investments between suppliers of capital (such as retail investors and institutional investors) and users of capital (like business, government and individuals)
Suppliers of Capital Markets – Generally want the maximum possible return at the lowest possible risk
Major Suppliers of funds in capital markets:
Commercial Banks (accepting banks deposits from customers, raising capital from investors or lenders and they use money to get loan)
Insurance Companies (creating value by pooling and