Skip to main content
UploadLanguage (EN)Support
BusinessMobileSocial MediaMarketingTechnologyArt & PhotosCareerDesignEducationPresentations & Public SpeakingGovernment & NonprofitHealthcareInternetLawLeadership & ManagementAutomotiveEngineeringSoftwareRecruiting & HRRetailSalesServicesScienceSmall Business & EntrepreneurshipFoodEnvironmentEconomy & FinanceData & AnalyticsInvestor RelationsSportsSpiritualNews & PoliticsTravelSelf ImprovementReal EstateEntertainment & HumorHealth & MedicineDevices & HardwareLifestyle
HA
Uploaded byHardik Asha
PPT, PDF5,142 views

The-financial-environment

This document discusses the financial environment, including financial markets and institutions. It describes financial markets as places where individuals and organizations looking to borrow funds are brought together with those having surplus funds. The markets are divided into money markets, which exchange short-term instruments under one year, and capital markets, which exchange long-term securities over one year. Primary markets are where new securities are issued, while secondary markets allow existing securities to be traded. The document also outlines various financial institutions that transfer funds between lenders and borrowers, such as commercial banks, credit unions, and mutual funds.

Business◦
Downloaded 96 times
THE FINANCIAL ENVIRONMENT - 1
THE FINANCIAL ENVIRONMENT MARKETS INSTITUTIONS INTEREST RATES
- Financial markets Types of financial institutions 3
WHAT IS A FINANCIAL MARKET?  A market is a venue where goods and services are exchanged.  A financial market is a place where individuals and organizations wanting to borrow funds are brought together with those having a surplus of funds. 4
FLOW OF FUNDS FROM LENDERS TO BORROWERS: 5
THE FINANCIAL MARKETS:  Money VS. capital markets  Primary VS. secondary markets  Public VS. private markets 6
THE FINANCIAL MARKETS:  The Money Market: Exchange of short-term instruments—less than one year Highly liquid, minimal risk  Commercial paper—short-term liabilities of prime business firms and finance companies  Bank Certificates of Deposits—liabilities of issuing bank, interest bearing to corporations that hold them  Treasury bills—short-term debts of government 7
THE FINANCIAL MARKETS:  The Capital Market: Exchange of long-term securities—in excess of one year Generally used to secure long-term financing for capital investment.  Stock market—Largest part of capital market and held by private and institutional investors  Residential and commercial mortgages—Held by commercial banks and life insurance companies  Corporate bond market—Held by insurance companies, pension and retirement funds 8
THE FINANCIAL MARKETS:  Primary Markets:  Market for issuing a new security and distributing to saver- lenders.  Initial Public Offering Market (IPO).  Investment Banks—Information and marketing specialists for newly issued securities. 9
THE FINANCIAL MARKETS:  Secondary Markets:  Market where existing securities can be exchanged  Bombay Stock Exchange American Stock Exchange Bombay Stock Exchange 10
FINANCIAL INSTITUTIONS: Funds are transferred between those who have funds and those who need funds by three processes:  Direct transfers,  Investment banking houses, or  Financial intermediaries. 11
FINANCIAL INTERMEDIARIES:  Commercial banks  Credit unions  Pension funds  Life insurance companies  Mutual funds 12
Prepared by HardikAsha 13