The document provides an overview of capital markets and security markets. It discusses how capital is raised in capital markets through various financial instruments like bonds, stocks, and funds. It also describes the three main sectors of the US economy and how physical and electronic security markets work. It outlines the key legislation governing security markets and how prices rapidly adjust in efficient markets.
The document discusses different types of securities markets including primary markets for initial public offerings, secondary markets for trading existing securities, and organized exchanges. It describes the initial public offering process and roles of investment banks in underwriting new issues. Different market structures are examined, including the New York Stock Exchange, Nasdaq, and over-the-counter markets. Basic securities transactions such as long purchases, margin trading, and short selling are also outlined.
This document provides an overview of financial markets and institutions. It discusses the role and functions of financial markets in facilitating the transfer of funds from surplus units to deficit units. It also describes different types of financial markets, securities traded in these markets such as money market securities, bonds, stocks and derivatives. Finally, it examines the roles of various financial institutions like commercial banks, savings institutions, mutual funds, securities firms, insurance companies and pension funds in financial markets. It also discusses competition and consolidation trends in the financial industry.
Foreign capital market and its instrumentsArjun Bhalla
The document discusses capital markets and their instruments. It defines capital markets as dealing with medium to long term funds through securities like stocks and bonds. Capital markets have two main functions: raising long term funds for organizations and mobilizing savings. They help speed economic growth and ensure continuous availability of funds. Capital market instruments include equity, debt, insurance, and hybrid instruments. Equity instruments provide ownership, while debt instruments are borrowed funds that must be repaid with interest. Well-regulated capital markets are important for trade and economic development.
Role of Financial Markets Note - A-Level & IB EconomicsQurious Education
Financial markets play several important roles in the economy. They facilitate saving and lending through banks and capital markets, allowing individuals and businesses to borrow money for consumption, investment, and trade. Financial markets also provide a venue for companies to raise capital through the issuance of stocks and bonds. By channeling funds from savers to borrowers, financial markets help allocate resources efficiently in the economy.
Financial institutions and markets notes as per BPUT syllabus for MBA 2nd sem...Venkat Kothakota
The document provides information on the Indian financial market and its various components. It discusses the money market and capital market as the two main organized financial markets in India. The money market is further divided into unorganized and organized segments. The unorganized segment includes money lenders, indigenous bankers, and chit funds. The organized money market comprises treasury bills, commercial paper, certificates of deposit, the call money market, and the commercial bill market. The capital market provides long-term finance and consists of the industrial securities market, government securities market, and long-term loans market.
This document provides an overview of the key components of the Indian financial system. It discusses financial intermediaries like banks, mutual funds, insurance companies, and pension funds. It also describes different types of financial markets including money markets, bond markets, stock markets, and derivatives markets. It outlines various financial instruments such as bonds, stocks, and derivatives. Finally, it discusses the different regulators that oversee the various segments of the Indian financial system, including the RBI, SEBI, and IRDA.
Introduction To Financial Institution Saguest3e1da1
The document provides an overview of financial markets and institutions. It defines key terms like financial market, security, and the two main types of markets - exchanges and over-the-counter. It also describes the main types of financial institutions like commercial banks, investment banks, and universal banks. Commercial banks' main activities are taking deposits and lending, while investment banks focus on underwriting new issues and secondary market activities. Many large financial institutions today are universal banks that engage in both commercial and investment banking activities.
The document discusses different types of securities markets including primary markets for initial public offerings, secondary markets for trading existing securities, and organized exchanges. It describes the initial public offering process and roles of investment banks in underwriting new issues. Different market structures are examined, including the New York Stock Exchange, Nasdaq, and over-the-counter markets. Basic securities transactions such as long purchases, margin trading, and short selling are also outlined.
This document provides an overview of financial markets and institutions. It discusses the role and functions of financial markets in facilitating the transfer of funds from surplus units to deficit units. It also describes different types of financial markets, securities traded in these markets such as money market securities, bonds, stocks and derivatives. Finally, it examines the roles of various financial institutions like commercial banks, savings institutions, mutual funds, securities firms, insurance companies and pension funds in financial markets. It also discusses competition and consolidation trends in the financial industry.
Foreign capital market and its instrumentsArjun Bhalla
The document discusses capital markets and their instruments. It defines capital markets as dealing with medium to long term funds through securities like stocks and bonds. Capital markets have two main functions: raising long term funds for organizations and mobilizing savings. They help speed economic growth and ensure continuous availability of funds. Capital market instruments include equity, debt, insurance, and hybrid instruments. Equity instruments provide ownership, while debt instruments are borrowed funds that must be repaid with interest. Well-regulated capital markets are important for trade and economic development.
Role of Financial Markets Note - A-Level & IB EconomicsQurious Education
Financial markets play several important roles in the economy. They facilitate saving and lending through banks and capital markets, allowing individuals and businesses to borrow money for consumption, investment, and trade. Financial markets also provide a venue for companies to raise capital through the issuance of stocks and bonds. By channeling funds from savers to borrowers, financial markets help allocate resources efficiently in the economy.
Financial institutions and markets notes as per BPUT syllabus for MBA 2nd sem...Venkat Kothakota
The document provides information on the Indian financial market and its various components. It discusses the money market and capital market as the two main organized financial markets in India. The money market is further divided into unorganized and organized segments. The unorganized segment includes money lenders, indigenous bankers, and chit funds. The organized money market comprises treasury bills, commercial paper, certificates of deposit, the call money market, and the commercial bill market. The capital market provides long-term finance and consists of the industrial securities market, government securities market, and long-term loans market.
This document provides an overview of the key components of the Indian financial system. It discusses financial intermediaries like banks, mutual funds, insurance companies, and pension funds. It also describes different types of financial markets including money markets, bond markets, stock markets, and derivatives markets. It outlines various financial instruments such as bonds, stocks, and derivatives. Finally, it discusses the different regulators that oversee the various segments of the Indian financial system, including the RBI, SEBI, and IRDA.
Introduction To Financial Institution Saguest3e1da1
The document provides an overview of financial markets and institutions. It defines key terms like financial market, security, and the two main types of markets - exchanges and over-the-counter. It also describes the main types of financial institutions like commercial banks, investment banks, and universal banks. Commercial banks' main activities are taking deposits and lending, while investment banks focus on underwriting new issues and secondary market activities. Many large financial institutions today are universal banks that engage in both commercial and investment banking activities.
The document provides an overview of capital markets and the various participants and intermediaries that operate within them, including governments, financial institutions, and other organizations. It discusses the roles of these participants, as well as financial innovation, regulation, and the different types of financial institutions like banks, insurance companies, asset managers, and exchanges. It also covers topics like orders, trading, costs, and various stock market indicators.
This document provides an overview of financial markets and institutions. It defines financial markets as markets for trading financial assets like stocks and bonds. It describes the main roles of financial markets as facilitating financial intermediation, providing a payments system, and allowing risk management. The document also outlines different types of financial markets and securities traded on markets. It discusses the role of financial institutions in processing information, lowering transaction costs, and addressing market imperfections to serve borrowers and lenders. Finally, it notes trends in financial institutions like consolidation, increased competition, and global expansion.
The document summarizes key aspects of international financial markets and the international monetary system. It discusses the foreign exchange market, how exchange rates work, and the major currency trading centers. It also outlines the roles and functions of international capital markets, bond markets, equity markets, and offshore financial centers in facilitating international financial transactions and currency conversion between nations.
The document discusses international financial markets and the international monetary system. It provides definitions and explanations of key concepts such as foreign exchange, exchange rates, international capital markets, foreign exchange markets, offshore financial centers, and the functions of the foreign exchange market. The foreign exchange market allows for the conversion of currencies and provides insurance against foreign exchange risk. It operates globally and continuously as a decentralized over-the-counter market and interbank market.
IBF is a facility wherein the US Banking institutions provide banking services such as granting loans, accepting deposits, to foreign residents and foreign banks.
To know more about it, click on the link given below:
https://efinancemanagement.com/international-financial-management/banking-facility
Investment Management - Financial Market and InstitutionsDr. John V. Padua
This document provides an overview of financial markets and institutions. It defines key terms like financial system, markets, institutions and regulations. It describes the main components and functions of the financial system including borrowing/lending, price determination and risk sharing. It also outlines the major types of financial institutions like commercial banks, investment funds, insurance companies and their risk-reducing roles. Finally, it discusses reasons for financial regulation including increasing information transparency and ensuring system stability.
This chapter discusses why studying money, banking, and financial markets is important: to understand how financial markets work; how banks and other financial institutions operate; and the role of monetary policy. It provides an overview of key concepts like financial markets, the bond market, stock market, financial institutions, and past financial crises.
Financial markets facilitate various types of financial transactions that help businesses grow and investors earn money. They include capital markets, stock markets, bond markets, money markets, derivatives markets, foreign exchange markets, insurance markets, and commodity markets. Financial markets allow companies and governments to raise funds by issuing stocks, bonds, and other financial instruments, while also enabling investors to buy and sell existing securities. They play a vital role in the economy by connecting those who need to borrow money with those who have money to lend.
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.
Investment banks provide various financial services including assisting with mergers and acquisitions, raising capital through underwriting securities, and facilitating trading and research. While investment banks emerged in the 16th century, they expanded rapidly in the 20th century. In India, investment banks first emerged in the 19th century and saw more growth in the late 20th century. Investment banks are organized into front, middle, and back offices that perform revenue-generating, risk management, and operational functions. However, risky practices involving collateralized debt obligations and subprime mortgages at Lehman Brothers ultimately led to its collapse during the late 2000s financial crisis.
Financial Market is the market where financial securities like stocks and bonds and commodities like valuable metals are exchanged at efficient market prices. Here, by efficient market prices we mean the unbiased price that reflects belief at collective speculation of all investors about the future prospect. The trading of stocks and bonds in the Financial Market can take place directly between buyers and sellers or by the medium of Stock Exchange. Financial Markets can be domestic or international.
The document defines and describes key components of a financial system. It explains that a financial system consists of financial institutions and markets that facilitate the transfer of funds between entities with excess capital and those with deficits. It outlines the main participants in financial systems as households, companies, governments, and foreigners. It also describes various financial intermediaries like banks, investment funds, pension funds, and insurance companies. Finally, it provides examples of different types of financial markets and securities.
This document provides an overview of financial markets and institutions. It discusses the key functions of financial markets in channeling funds from surplus to deficit units. It describes the structure of financial markets, including the distinction between debt and equity markets, primary vs secondary markets, and money vs capital markets. The main instruments traded in these markets are also outlined. The document then discusses the role of financial institutions in providing indirect finance and transforming financial assets. It identifies the main types of financial institutions like depository institutions, contractual savings institutions, and investment intermediaries. Finally, it covers the rationale for regulating financial markets and institutions to increase information and ensure overall financial system stability.
FDSeminar Financiering na Basel III Bram Delmotte - Monard D'HulstFDMagazine
This document discusses alternative sources of debt financing beyond traditional bank loans. It outlines various types of bonds like retail bonds, private placements, and mini-bonds. It also discusses alternative bank financing options like asset-based lending, leasing, and invoice financing. Finally, it explores alternative non-bank financing such as crowdfunding, credit from suppliers or insurers, and funds from private equity, hedge funds or government initiatives. Throughout it considers various criteria for determining the appropriate financial structure and legal considerations around these alternative financing options.
The document defines financial markets as places where trading of securities like stocks, bonds, and currencies occurs. It then discusses that financial markets facilitate raising capital, transferring risk, and matching those who want capital with those who have it. The document goes on to describe different types of financial markets like the money market, capital market, foreign exchange market, and derivatives market. It provides details on what each market involves and how they help businesses, individuals, and the economy.
International banking involves banks conducting financial transactions that cross national borders. It provides services like trade financing, foreign exchange, and investment banking to clients engaged in international business. There are various types of international banking offices including correspondent banks, foreign branches, and offshore banking centers. Major reasons for international banking include gaining access to new markets for growth, taking advantage of regulatory differences between countries, and following multinational clients abroad. The largest risks international banks face come from currency fluctuations, issues in foreign economies, and credit risks from international loans.
Universal banking allows banks to provide a wide range of banking and financial services through a single point of contact. This includes deposit-taking and lending products as well as insurance, mutual funds, brokerage services, and more. It provides opportunities for cross-selling and fee-based income while also benefiting customers through one-stop shopping convenience. International banking facilitates trade and investment between countries by enabling payments, settlements, and other banking services in foreign exchange markets. It supports the needs of importers and exporters through products like letters of credit, bills of exchange, and guarantees. Depository receipts allow foreign investors to invest in a company listed abroad by purchasing a receipt that represents ownership of the underlying security.
The document discusses key elements of international financial systems including:
1) It defines international finance and discusses topics like exchange rates and foreign direct investment.
2) The global financial system consists of institutions that operate internationally, as opposed to nationally or regionally, and includes organizations like the IMF and central banks.
3) Core elements of any financial system include money, banking institutions, financial markets, instruments, and services.
1. International equity markets allow investors to buy and sell stocks outside of their home country. They are made up of stock exchanges around the world.
2. The major participants in international capital markets include commercial banks, non-bank financial institutions, private firms, and central banks/government agencies. They engage in activities like issuing stocks/bonds, lending, and foreign exchange market interventions.
3. Factors that affect international equity returns include macroeconomic conditions, exchange rate movements, and differences in industrial structures across countries. Returns are not strongly dictated by any single factor.
The document provides an overview of capital markets, including its definition, objectives, key components and functions. It discusses the primary and secondary markets, and the major players in capital markets such as brokers, investment bankers, stock exchanges, underwriters, credit rating agencies, corporations, banks/financial institutions, and foreign investors.
This document provides an overview of financial markets and institutions. It discusses why financial markets are important for channeling funds from savers to investors. It also describes the main functions of various financial markets, including debt markets, stock markets, and foreign exchange markets. Additionally, it outlines the roles of different financial institutions that operate within these markets, such as commercial banks, investment banks, insurance companies, and pension funds. The document emphasizes how financial markets and institutions facilitate the flow of funds in an economy.
The document provides an overview of capital markets and the various participants and intermediaries that operate within them, including governments, financial institutions, and other organizations. It discusses the roles of these participants, as well as financial innovation, regulation, and the different types of financial institutions like banks, insurance companies, asset managers, and exchanges. It also covers topics like orders, trading, costs, and various stock market indicators.
This document provides an overview of financial markets and institutions. It defines financial markets as markets for trading financial assets like stocks and bonds. It describes the main roles of financial markets as facilitating financial intermediation, providing a payments system, and allowing risk management. The document also outlines different types of financial markets and securities traded on markets. It discusses the role of financial institutions in processing information, lowering transaction costs, and addressing market imperfections to serve borrowers and lenders. Finally, it notes trends in financial institutions like consolidation, increased competition, and global expansion.
The document summarizes key aspects of international financial markets and the international monetary system. It discusses the foreign exchange market, how exchange rates work, and the major currency trading centers. It also outlines the roles and functions of international capital markets, bond markets, equity markets, and offshore financial centers in facilitating international financial transactions and currency conversion between nations.
The document discusses international financial markets and the international monetary system. It provides definitions and explanations of key concepts such as foreign exchange, exchange rates, international capital markets, foreign exchange markets, offshore financial centers, and the functions of the foreign exchange market. The foreign exchange market allows for the conversion of currencies and provides insurance against foreign exchange risk. It operates globally and continuously as a decentralized over-the-counter market and interbank market.
IBF is a facility wherein the US Banking institutions provide banking services such as granting loans, accepting deposits, to foreign residents and foreign banks.
To know more about it, click on the link given below:
https://efinancemanagement.com/international-financial-management/banking-facility
Investment Management - Financial Market and InstitutionsDr. John V. Padua
This document provides an overview of financial markets and institutions. It defines key terms like financial system, markets, institutions and regulations. It describes the main components and functions of the financial system including borrowing/lending, price determination and risk sharing. It also outlines the major types of financial institutions like commercial banks, investment funds, insurance companies and their risk-reducing roles. Finally, it discusses reasons for financial regulation including increasing information transparency and ensuring system stability.
This chapter discusses why studying money, banking, and financial markets is important: to understand how financial markets work; how banks and other financial institutions operate; and the role of monetary policy. It provides an overview of key concepts like financial markets, the bond market, stock market, financial institutions, and past financial crises.
Financial markets facilitate various types of financial transactions that help businesses grow and investors earn money. They include capital markets, stock markets, bond markets, money markets, derivatives markets, foreign exchange markets, insurance markets, and commodity markets. Financial markets allow companies and governments to raise funds by issuing stocks, bonds, and other financial instruments, while also enabling investors to buy and sell existing securities. They play a vital role in the economy by connecting those who need to borrow money with those who have money to lend.
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.
Investment banks provide various financial services including assisting with mergers and acquisitions, raising capital through underwriting securities, and facilitating trading and research. While investment banks emerged in the 16th century, they expanded rapidly in the 20th century. In India, investment banks first emerged in the 19th century and saw more growth in the late 20th century. Investment banks are organized into front, middle, and back offices that perform revenue-generating, risk management, and operational functions. However, risky practices involving collateralized debt obligations and subprime mortgages at Lehman Brothers ultimately led to its collapse during the late 2000s financial crisis.
Financial Market is the market where financial securities like stocks and bonds and commodities like valuable metals are exchanged at efficient market prices. Here, by efficient market prices we mean the unbiased price that reflects belief at collective speculation of all investors about the future prospect. The trading of stocks and bonds in the Financial Market can take place directly between buyers and sellers or by the medium of Stock Exchange. Financial Markets can be domestic or international.
The document defines and describes key components of a financial system. It explains that a financial system consists of financial institutions and markets that facilitate the transfer of funds between entities with excess capital and those with deficits. It outlines the main participants in financial systems as households, companies, governments, and foreigners. It also describes various financial intermediaries like banks, investment funds, pension funds, and insurance companies. Finally, it provides examples of different types of financial markets and securities.
This document provides an overview of financial markets and institutions. It discusses the key functions of financial markets in channeling funds from surplus to deficit units. It describes the structure of financial markets, including the distinction between debt and equity markets, primary vs secondary markets, and money vs capital markets. The main instruments traded in these markets are also outlined. The document then discusses the role of financial institutions in providing indirect finance and transforming financial assets. It identifies the main types of financial institutions like depository institutions, contractual savings institutions, and investment intermediaries. Finally, it covers the rationale for regulating financial markets and institutions to increase information and ensure overall financial system stability.
FDSeminar Financiering na Basel III Bram Delmotte - Monard D'HulstFDMagazine
This document discusses alternative sources of debt financing beyond traditional bank loans. It outlines various types of bonds like retail bonds, private placements, and mini-bonds. It also discusses alternative bank financing options like asset-based lending, leasing, and invoice financing. Finally, it explores alternative non-bank financing such as crowdfunding, credit from suppliers or insurers, and funds from private equity, hedge funds or government initiatives. Throughout it considers various criteria for determining the appropriate financial structure and legal considerations around these alternative financing options.
The document defines financial markets as places where trading of securities like stocks, bonds, and currencies occurs. It then discusses that financial markets facilitate raising capital, transferring risk, and matching those who want capital with those who have it. The document goes on to describe different types of financial markets like the money market, capital market, foreign exchange market, and derivatives market. It provides details on what each market involves and how they help businesses, individuals, and the economy.
International banking involves banks conducting financial transactions that cross national borders. It provides services like trade financing, foreign exchange, and investment banking to clients engaged in international business. There are various types of international banking offices including correspondent banks, foreign branches, and offshore banking centers. Major reasons for international banking include gaining access to new markets for growth, taking advantage of regulatory differences between countries, and following multinational clients abroad. The largest risks international banks face come from currency fluctuations, issues in foreign economies, and credit risks from international loans.
Universal banking allows banks to provide a wide range of banking and financial services through a single point of contact. This includes deposit-taking and lending products as well as insurance, mutual funds, brokerage services, and more. It provides opportunities for cross-selling and fee-based income while also benefiting customers through one-stop shopping convenience. International banking facilitates trade and investment between countries by enabling payments, settlements, and other banking services in foreign exchange markets. It supports the needs of importers and exporters through products like letters of credit, bills of exchange, and guarantees. Depository receipts allow foreign investors to invest in a company listed abroad by purchasing a receipt that represents ownership of the underlying security.
The document discusses key elements of international financial systems including:
1) It defines international finance and discusses topics like exchange rates and foreign direct investment.
2) The global financial system consists of institutions that operate internationally, as opposed to nationally or regionally, and includes organizations like the IMF and central banks.
3) Core elements of any financial system include money, banking institutions, financial markets, instruments, and services.
1. International equity markets allow investors to buy and sell stocks outside of their home country. They are made up of stock exchanges around the world.
2. The major participants in international capital markets include commercial banks, non-bank financial institutions, private firms, and central banks/government agencies. They engage in activities like issuing stocks/bonds, lending, and foreign exchange market interventions.
3. Factors that affect international equity returns include macroeconomic conditions, exchange rate movements, and differences in industrial structures across countries. Returns are not strongly dictated by any single factor.
The document provides an overview of capital markets, including its definition, objectives, key components and functions. It discusses the primary and secondary markets, and the major players in capital markets such as brokers, investment bankers, stock exchanges, underwriters, credit rating agencies, corporations, banks/financial institutions, and foreign investors.
This document provides an overview of financial markets and institutions. It discusses why financial markets are important for channeling funds from savers to investors. It also describes the main functions of various financial markets, including debt markets, stock markets, and foreign exchange markets. Additionally, it outlines the roles of different financial institutions that operate within these markets, such as commercial banks, investment banks, insurance companies, and pension funds. The document emphasizes how financial markets and institutions facilitate the flow of funds in an economy.
The document discusses various types of securities markets and transactions. It describes primary and secondary markets, and the initial public offering (IPO) process. Broker markets involve exchanges that bring buyers and sellers together, while dealer markets involve market makers that buy and sell securities. The document also discusses margin transactions, short selling, and regulation of securities markets.
The document discusses international equity markets. It provides statistics on market capitalization, liquidity, and concentration of major stock exchanges in 2018. It describes how secondary markets allow for trading of shares and outlines different market structures. It discusses factors that drove greater global integration of capital markets in the 1980s and describes cross-listing of shares, Yankee stock offerings, and American Depository Receipts. It also summarizes empirical findings on cross-listings and provides an overview of international equity market benchmarks and iShares MSCI funds. In closing, it outlines macroeconomic factors, exchange rates, and industrial structure that can influence international equity returns.
mercado de formación y de valores 1.pptxedmundoraul
This document provides an overview of financial markets. It begins with classifying financial markets into primary and secondary markets, as well as money markets and capital markets. It then discusses various types of financial markets like stock markets, bond markets, foreign exchange markets, and derivatives markets. It provides examples of primary and secondary markets and describes the key participants and functions of stock exchanges. Finally, it distinguishes between money markets and capital markets, and explores foreign exchange and derivatives markets in more detail.
Financial Market Lecture Powerpoint for Financial Institution.pptArjelynCario
This document provides an overview of the financial market environment and key concepts in managerial finance. It discusses the roles of financial institutions and markets, how businesses can obtain funding, and differences between money and capital markets. Specific topics covered include commercial and investment banks, the 2008 financial crisis, regulations on financial systems, and business taxes. The overall purpose is to introduce learners to important entities and considerations in corporate finance.
Bussiness finanace: week 2 ppt IBA BATCH 2024QUARANTINETV
This document provides an overview of financial markets and institutions. It discusses how capital is transferred from savers to borrowers through direct transfers, investment banks, or financial intermediaries. It also describes key terms like investment bankers and financial intermediaries. The document outlines different types of financial markets (money markets, capital markets, public vs. private markets) and institutions (commercial banks, mutual funds, hedge funds). It concludes with a brief discussion of stock market efficiency.
This Presentations basically have a brief overview of the foreign stock markets which is a part of international financial markets in which I have assumed US as domestic country and rest of the remaining countries as foreign country or abroad.
The document provides information on secondary markets and stock exchanges in India. It defines secondary markets and stock exchanges, and describes their key functions such as providing liquidity, mobilizing funds, and facilitating valuation of securities. It also outlines the evolution of stock exchanges in India from the pre-reform era to the modern, technology-driven exchanges established post-1991 reforms. Major Indian stock exchanges like BSE and NSE are introduced along with important concepts related to stock markets such as listing of securities, dematerialization, and depository organizations.
This document discusses different types of financial markets including product, factor, and financial markets. It defines markets and their role in allocating resources. It also discusses primary and secondary financial markets, money markets, capital markets, popular securities, foreign exchange markets, and types of financial institutions. Key points are that financial markets determine prices and distribute income, primary markets issue new securities while secondary markets provide liquidity, and depository institutions help transmit monetary policy.
Securities firms act as brokers, executing transactions between parties for a fee. They also act as dealers, adjusting inventories of securities to make markets. Pension funds periodically contribute funds from employees and employers. Securities with over one year maturity are traded in capital markets like bonds, mortgages, and stocks. Financial markets facilitate the flow of funds from surplus units like households to deficit units like firms.
The document provides information about financial markets and money markets. It discusses:
1) What financial markets are and examples of primary and secondary markets. Primary markets involve the initial sale of securities while secondary markets involve existing securities changing hands.
2) Money markets, which involve short-term financial instruments with maturities of 1 year or less. Examples given are Treasury bills, federal funds, repurchase agreements, and certificates of deposit.
3) Key participants in US money markets including the Federal Reserve, government securities dealers, and commercial banks. The Treasury issues securities and the Federal Reserve influences money supply.
This document provides an introduction to investment management. It defines real and financial assets, and describes the taxonomy of financial assets including fixed-income securities, equity, and derivative securities. It discusses how financial markets allow for consumption timing, allocation of risk, and separation of ownership and management. The investment process includes asset allocation and security selection. Markets are competitive, following the risk-return tradeoff and efficient market hypothesis. The major players in financial markets are firms, households, and governments, connected by financial intermediaries. Recent trends impacting investments are globalization, securitization, financial engineering, and information technology.
This document provides an overview of financial markets and institutions. It discusses the key functions of financial markets, which include: [1] transferring funds from savers to spenders; [2] providing liquidity through facilitating the sale of securities; and [3] pricing securities through supply and demand. It also covers the regulation of financial markets to protect investors and the important role they play in facilitating efficient allocation of funds and allowing companies and governments to raise capital.
The document provides an overview of financial markets and their key segments and functions. It discusses that financial markets are places where financial instruments are bought and sold, and they promote economic efficiency by ensuring resources are allocated to their best use and keeping transactions costs low. The markets have two main segments: direct finance where borrowers borrow directly from lenders, and indirect finance where they borrow via financial intermediaries. The document also outlines the key roles of financial markets in providing liquidity, sharing information, and allowing for risk sharing.
This document discusses the challenges of developing Islamic capital markets. It notes that while Islamic finance has grown significantly over the past few decades, the Islamic capital markets still face several challenges including a lack of regulatory support, limited liquidity management tools, and differences in scholarly opinions that have prevented standardization. It recommends establishing a strong regulatory framework, developing new sharia-compliant financial products, and increasing cooperation between industry players and institutions to help the Islamic capital markets continue growing.
Econ315 Money and Banking: Learning Unit #04: Direct Financesakanor
Direct finance involves borrowers borrowing funds directly from lenders through financial markets by selling securities. Financial markets transfer funds from lenders to borrowers through primary and secondary markets. Primary markets involve the initial sale of new securities, while secondary markets allow existing securities to be traded. Financial markets provide risk sharing, liquidity, and information services. They are classified by maturity, type of claim, and trading place.
Mutual funds allow investors to pool their money together and have a professional fund manager make investment decisions on their behalf. The key benefits of mutual funds are professional management, diversification of risk, and low minimum investment amounts. There are various types of mutual funds classified by investment objective, including stock funds, bond funds, money market funds, and balanced funds. Investors can evaluate mutual funds based on factors like expenses, past performance, investment strategy, and whether they are actively or passively managed. Mutual funds are purchased from fund companies and can be held for income dividends, capital gains, or long-term appreciation when shares are eventually sold.
Derek Siewert managed the evaluation of loans, oversaw the drafting and execution of the loan acquisition documentation, executed the final purchase of the loan portfolio and set up the servicing of the portfolio after it was acquired.
This document discusses investment in securities. It begins by introducing securities and how they are traded in capital markets. There are two main types of securities - equity instruments and debt instruments, with hybrids having characteristics of both. Equity represents ownership while debt represents borrowing with a fixed maturity. Common stocks are the most common equity instrument, providing residual ownership, while bonds are the most common debt instrument with fixed interest payments. The document then discusses various equity-related concepts like initial public offerings, stock screening for Shariah compliance, and the components of an Islamic equities market.
Wealth planning and management is a comprehensive program to plan and manage one's finances. It is useful for high-net-worth individuals and corporations. Users require services like investments, taxes, banking, and insurance. Providers include banks, fund managers, insurance agents, and more. Various organizations govern the industry and establish codes of ethics for professionals to act with integrity, objectivity, and put clients' interests first. Regulators also oversee the industry to protect consumers and maintain confidence.
The document discusses capital markets and securities. It covers various topics such as the types of security markets (money markets and capital markets), listing requirements for exchanges like the NYSE, how the organization of markets has changed with the rise of electronic communication networks, and how efficiently markets incorporate information into stock prices. It provides an overview of the key components and functioning of capital markets.
The document discusses wealth planning and management through the Islamic instrument of waqf (endowment). It begins by explaining the hadith about a person's good deeds continuing after death through recurring charity, beneficial knowledge, and righteous children. It then defines waqf and describes the three main types: public waqf, family waqf, and combined public-family waqf. The conditions for valid waqf creation and permissible waqf assets are also summarized.
Based on the information provided:
- Short-term rates increased to 11%
- Long-term rates remain at 13%
- Temporary current assets remain at $1,000,000
- Permanent current assets remain at $2,000,000
- Fixed assets remain at $1,200,000
- Earnings before interest and taxes remain at $996,000
- Tax rate remains at 40%
With the new short-term rate of 11%, short-term interest expense would be:
Temporary current assets of $1,000,000 at 11% = $110,000
Long-term interest expense and the calculation of earnings after taxes remains the same.
Therefore
This chapter discusses various topics in investment banking including public and private placements. It describes the roles of investment bankers such as underwriting securities, making markets, and advising clients. It also covers the process of distributing securities including setting prices and dealing with dilution. Additionally, it compares public versus private financing and discusses leveraged buyouts. In closing, it briefly touches on going private, methods of doing so, and privatization.
The document provides an overview of capital markets and security markets. It discusses how capital is raised in capital markets through various financial instruments like bonds, stocks, and funds. It also describes the key participants in capital markets like households, corporations, and government entities. The security markets are organized into various submarkets and exchanges. Over time, markets have become more electronic and integrated through technological advances. Regulations aim to make markets fair, transparent, and protect investors.
The document discusses various models for modern applications of cash waqf, including:
1. Waqf shares model where investors purchase shares in a religious institution that manages the funds.
2. Waqf takaful model where contributors pay monthly amounts that are invested, with profits used for charitable purposes.
3. Direct model where contributors deposit funds directly into bank accounts of religious authorities.
4. Mobile model allowing contributions via SMS that are invested and profits used for charity.
The document provides an overview of capital markets and security markets. It discusses how capital is raised in capital markets through various financial instruments like bonds, stocks, and funds. It also describes the key participants in capital markets like households, corporations, and government entities. The security markets are organized into various submarkets and exchanges. Over time, markets have become more electronic and integrated through technological advances. Stringent regulations aim to promote efficiency and protect investors.
The document discusses various sources of short-term financing including trade credit, bank loans, commercial paper, and borrowing larger amounts. It covers topics such as lines of credit, prime rates, LIBOR rates, compensating balances, maturity provisions, and the costs of commercial bank financing. The document also discusses using accounts receivable as collateral through methods like pledging receivables or factoring receivables.
The document discusses current asset management, including cash management, marketable securities, accounts receivable, and inventory management. It covers topics such as cash flow cycles, float, credit policies, inventory levels, and inventory decision models. The goal of current asset management is to balance liquidity needs with maximizing returns through techniques like minimizing cash balances and actively managing accounts receivable and inventory levels.
The document discusses current asset management, including cash management, management of marketable securities, accounts receivable, and inventory management. It covers topics such as cash flow cycles, improving collections and extending disbursements, inventory policy and economic order quantity models, just-in-time inventory management, and areas of concern for various current asset management strategies and techniques. The overall document provides an overview of key considerations and approaches for managing a company's current assets.
The document discusses current asset management, including cash management, marketable securities, accounts receivable, and inventory management. It covers topics such as cash flow cycles, float, credit policies, inventory levels, and inventory decision models. The goal of current asset management is to balance liquidity needs with maximizing returns through techniques like minimizing cash balances and actively managing receivables, marketable securities, and inventory levels.
This document outlines key concepts around working capital management and financing decisions. It discusses matching a firm's current asset levels with forecasted sales and production schedules. It also covers controlling assets by matching sales and production levels. Additionally, it examines using long-term versus short-term financing to fund different types of current assets, as well as how financing decisions impact risk and profitability. Overall, the document provides an overview of effective working capital management strategies.
The document discusses key concepts related to Islamic wealth planning and management, including:
1) It describes the asset allocation process as systematic for reducing overall market risk and unsystematic for reducing company-specific risks through diversification.
2) It outlines the degrees of market efficiency from strong to weak and their implications for using fundamental and technical analysis.
3) It explains that investors should buy undervalued stocks expected to increase in price and sell overvalued stocks expected to decrease in price.
The document discusses the importance of wealth allocation in successful wealth planning. It describes the main components of the wealth allocation process as establishing objectives, identifying opportunities and risks/constraints, and determining potential investment channels. The two major components are the investment policy statement and portfolio management process. It then provides details on what should be included in the investment policy statement and introduces the portfolio allocation scoring system used to determine the appropriate asset allocation mix based on a client's total score.
The document discusses the nature and scope of wealth planning in Islam. It defines wealth planning and compares it to financial planning, noting their similarities such as both aiming to enhance value, but also their differences like wealth planning being long term focused. It also compares conventional and Islamic wealth planning, noting similarities like both containing accumulation and distribution functions, but differences like Islamic wealth planning needing to follow Shariah law. The significance of different stages in the wealth planning process is explained. The concept of trade-offs is discussed in relation to risk and return, and how the Islamic concept differs by also considering trade-offs between this life and the next.
This document provides an overview of the goals and functions of financial management. It discusses how financial management links economic theory and accounting data. The primary goal of financial managers is to maximize shareholder wealth while balancing risk. Modern issues include risk-return analysis, capital structure, and the impact of inflation and technology. Financial markets help allocate capital and provide feedback to companies on performance.
Reimagining Your Library Space: How to Increase the Vibes in Your Library No ...Diana Rendina
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Walmart Business+ and Spark Good for Nonprofits.pdfTechSoup
"Learn about all the ways Walmart supports nonprofit organizations.
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Topic 006
1. Chapter 14
Capital Markets
By
Md. Shahedur Rahaman
Chowdhury
14-1
2. Chapter Outline
• Capital market and securities
• Fund raisers in the capital markets
• The three-sector economy of the United
States
• Physical and electronic markets
• Rapid adjustment of prices as an indication
of efficiency
• Security legislation
14-2
3. Security Markets
• Consist of various government bonds and
corporate common stock
• The markets are influenced by variables like:
– Interest rates
– Investor confidence
– Economic growth
– Global crises, etc.
14-3
4. Types of Security Markets
• Money markets
– Short-term markets comprising of securities with
maturities of one year or less
• Treasury bills, commercial paper, negotiable
certificates of deposits
• Capital markets
– Long-term markets consisting of securities
having maturities greater than one year
• Bonds, common stock, preferred stock, convertible
securities
• These securities comprise a firm’s capital structure
14-4
5. International Capital Markets
• Have played an important role over the last
decade due to various factors:
– The Soviet Union disbanded in 1991
– China has moved along a capitalistic course for several
decades
– Central and Eastern European countries “privatized”
many of their state industries during the 1990s
– Continuing development of international “free trade”
14-5
6. International Capital Markets
(cont’d)
– Establishment of NAFTA in 1994
– CAFTA reduces trade barriers
– The six original members of EU abolished internal tariffs
in 1968
– WTO strives to further liberalize international trade
– Euro still considered second most important international
currency
– Value of “euro cash” in circulation now exceeds value of
dollars in circulation worldwide
14-6
8. International Capital Markets
as a Source of Funds
• An opportunity for companies to raise debt
capital at the lowest cost
• Many list their common stock around the
world to:
– Increase liquidity for the stockholders
– Provide opportunities for the potential sale of
new stock in foreign countries
• About 3.7% of foreign investment has been
invested in government securities
14-8
9. Competition for Funds
in the U.S. Capital Markets
• Securities available in the capital market:
– The federal government
– Government agencies
– State governments
– Local municipalities
• Investors must choose among corporate and
noncorporate securities with the desire to:
– Maximize returns for any given level of risk
14-9
10. Government Securities
• U.S. government securities - Treasury
– Manages the federal government’s debt in order
to balance the flow of funds
– Sells short- or long-term securities to finance
shortfalls or retires in case of surplus
• Federally sponsored credit agencies
– Governmental units issuing securities on a
separate basis from those sold by U.S. Treasury
– Includes:
• Federal Home Loan Banks (FHLB)
14-10
11. Government Securities (cont’d)
• Federal National Mortgage Association (Fannie Mae)
• Farm Credit Banks
• Student Loan Marketing Association
• State and local securities
– Municipal securities or tax-exempt offerings
– Investors - high marginal tax brackets
– Supported by revenue-generating projects
14-11
12. Corporate Securities
• Corporate bonds
– Debt instruments having a fixed life and to be
repaid at maturity
– As bonds come due and are paid off, the
corporation normally replaces this debt with new
bonds
• Preferred stock
– Least used of all long-term securities since the
dividend is not tax-deductible to the corporation
14-12
13. Corporate Securities (cont’d)
• Common stock
– Sold by companies desiring new equity capital
– Either sold as a new issue in an initial public
offering (IPO) or as a secondary offering
– Treasury stock: When a company purchases its
own stock – availability of surplus cash
14-13
14. Internal versus External
Sources of Funds
• Internally generated funds include retained
earnings and cash flow added back from
depreciation
– Composition of internal funds is a function of:
• Corporate profitability
• The dividends paid
• The resultant retained earnings
• The depreciation tax shield firms avail
14-14
16. The Supply of Capital Funds
• Household sector - major supplier of funds
• Indirect investments:
– Household savings generated by wages
– Transfer payments from the government
– Wages and dividends from the corporations
• These are funneled to financial intermediaries
• Diverse financial institutions channel funds into
commercial banks, mutual savings banks, and credit
unions
14-16
19. The Role of the Security Markets
• The capital markets are divided into many
functional subsets
– Each specific market serves a certain type of
security
• Secondary trading:
– The security trades in appropriate markets – not
original offering
– Provides liquidity to investors and keeps the
prices competitive
14-19
20. The Role of the Security Markets
(cont’d)
• Security markets provide liquidity by:
– Enabling corporations to raise funds by selling
new issues of securities
– Allowing investor to sell them with relative ease
and speed
• Corporations and government units would
not be able to raise large amounts of capital
for economic growth – without markets
14-20
21. The Organization
of the Security Markets
• Security markets structuring has changed
because of:
– Technological advances which include:
• The rise of electronic communication networks
(ECNs)
• Mergers or alliances between exchanges
• Transformation of member exchanges into public
companies
• Acquisition of leading ECNs by the traditional
exchanges
14-21
22. Traditional Organized Exchanges
• Either national or regional, both structured in
similar fashion
• Historically, exchanges have central trading
location, securities bought & sold in auction market
by brokers acting as agents for buyers & sellers
• Each stock trades at a physical location, trading
post, on exchange’s trading floor
• Brokers are registered members of exchanges
14-22
23. Regional Exchanges
• Began by trading securities of local firms
• Also listed on national exchanges but continued to
be traded on regionals
• Trade primarily done in nationally known
companies
• Trading in same companies common between
NYSE and regionals like Chicago Stock Exchange
— dual trading
• More than 90 percent of companies traded on the
Chicago Stock Exchange also listed on the NYSE -
dual trading
14-23
24. Listing Requirements
• A firm’s securities can be traded on an exchange if
company meets listing requirements and has been
approved by board of governors of that exchange
• All exchanges have minimum requirements that
must be met before trading occurs in company’s
common stock
• NYSE - biggest exchange, generates most dollar
volume in large companies, listing requirements
are most restrictive
• NASDAQ has less restrictive listing requirements
than NYSE
14-24
25. Electronic Communication
Networks (ECNs)
• Electronic trading systems that automatically buy
and sell orders at specified prices
– Also known as alternative trading systems (ATSs)
– Have SEC approval to be fully integrated into the
national market system
– Can choose to act as broker-dealer or an exchange
– Lower the cost of trading
– Forced organized security exchanges to make significant
changes in their operations and structure
14-25
26. The New York Stock Exchange
• In 2006, NYSE merged with a large ECN and
became a public company
– Comprises of thousands of huge companies whose
shares are listed on the NYSE
– Specialists meet to buy and sell securities through a bid
and ask market, called an auction market
• They are registered members of the exchange
– In addition to acquiring Archipelago, NYSE merged with
Euronext
– NYSE acquired American Stock Exchange in 2008
14-26
27. The NASDAQ Market
• NASDAQ:
– Was once considered an OTC market
– All trades done electronically
– Second largest exchange in the U.S.
– Currently owns 30% of London Stock Exchange
– Known for trading technology and listing of many
of the world’s largest technology companies
14-27
28. The NASDAQ Market (cont’d)
– Created SuperMontage, electronic trading
system that integrates trading process with limit
orders, time stamps for receipt of orders,
multiple quotes, etc.
– Acquired the largest ECN called INET, and later
BRUT
– Created more speed and price efficiency in
order executions
– Divides its markets into national and small
capitalization markets
14-28
30. Market Efficiency
• Markets in general are efficient when:
– Prices adjust rapidly to new information
– There is a continuous market, in which each
successive trade is made at a price closer to the
previous price
– The market can absorb large dollar amounts of
securities without destabilizing the prices
• The important variable affecting efficiency is
the certainty of income stream
14-30
31. Market Efficiency (cont’d)
• Fixed income securities, with known
maturities, have reasonably efficient markets
– The most efficient is that for U.S. government
securities
– Corporate bond markets are reasonable to a
degree
– Common stocks market has been supported
through decimalization, ECNs, etc.
14-31
32. The Efficient Market Hypothesis
• Weak form
– Past price information is unrelated to future price
– Trends cannot be predicted and taken
advantage of by investors
• Semistrong form
– Prices currently reflect all public information
• Strong form
– All information, both private and public, is
immediately reflected in stock prices
14-32
33. Regulation of the Security Markets
• Organized securities markets are regulated
by the:
– Securities and Exchange Commission (SEC)
– Self-regulation of the exchanges
• Three laws govern the sale and trading of
securities with a primary purpose:
– To protect unwary investors from fraud and
manipulation
– To make markets more competitive and
transparent
14-33
34. Securities Act of 1933
• Important features include:
– All offerings except government bonds and bank stocks to be
sold in more than one state to be registered with the SEC
– The registration statement is to be filled 20 days in advance of
date of sale and must include detailed corporate information
– The SEC does not certify the fairness of a price, but only that
the information seems to be accurate
– All new issues of securities must be accompanied by a
prospectus containing the same information appearing in the
registration statement
– Officers of the company and other experts preparing the
prospectus or the registration statement could be sued for
penalties and recovery of realized losses in case of
discrepancies in information
14-34
35. Securities Exchange Act of 1934
• Some of the important features include:
– Guidelines for insider trading preventing them from
taking quick advantage of information resulting in short-
term gains
– The Federal Reserve’s Board of Governors responsible
for setting margin requirements to determine quantity of
credit
– Manipulation of securities by conspiracies among
investors was prohibited
– SEC given control over the proxy procedures of
corporations
– SEC required that certain reports be filled periodically,
for its regulation of companies traded on the markets
– All security exchanges to register with the SEC
14-35
36. Securities Acts Amendments of
1975
• Major focus: to direct the SEC to supervise the
development of a national securities market
– Assumed that any national market would extensively use
computers and electronic communication devices
– Prohibited fixed commissions on public transactions,
also prohibited banks, insurance companies and other
financial institutions from buying stock exchange
membership to save commission costs
– The Intermarket Trading system, computerization
demonstrated by the ECNs, and a more competitive
structure has now been observed
14-36
37. Sarbanes-Oxley Act of 2002
• Not directly related to security trading
• Features include:
– Authorization of an independent private-sector board to
oversee the accounting profession
– Creation of new penalties and long prison terms for
corporate fraud and document destruction
– Restrictions on accounting firms from providing
consulting services to audit clients, and other similar
provisions
– The act holds corporate executives legally accountable
for the accuracy of their firm’s financial statements
– It requires the CEO, along with the CFO, to sign off
documents, making monitoring a very serious business
14-37