Financial Environment

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Course Teacher
Md. Azizur Rahman
Lecturer in Finance
IIUC - DC

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Financial Environment
Financial circumstances
or conditions.

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Financial Market
The market at which
financial securities are
traded & it facilitates:
 The raising of capital in
the capital market;
 The transfer of risk in the
derivative market; and
 International trade in the
currency market.

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Money Market vs Capital Market
Money market deals with short-term
securities but capital market deals
with long-term securities.

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Primary vs Secondary Market
Primary market deals with newly
issued securities are traded, where as
at secondary market existing
securities are traded.

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Financial Institution
It acts as an agent which
provides financial services
for its clients.

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Types of Financial Institutions
i. DFIs: They provide long-
term funds for
development purpose of
the corporate firms &
other agencies.
ii. Non-DFIs: They provide
short-term funds for
working capital needs of
the firms.

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Investment Bank vs. Merchant Bank
 Merchant bank is an European concept
where as investment bank is an
American concept.
 Merchant bank sometimes operate
beyond their jurisdiction in financial
interim securities, where as
investment bank mainly concentrate
on capital market & their activities.