金融市场与机制.docVIP

Chapter1 Role of Financial Markets and Institutions 1. Financial Market (Def.): A market in which financial assets (securities) such as stocks and bonds can be purchased or sold. 2. Broad Classifications of Financial Markets 1) Money versus Capital Markets n Money: Short-Term, 1 Year; High Quality Issuers; Debt Only; Primary Market Focus; Liquidity Market--Low Returns n Capital: Long-Term, 1Yr; RangeofIssuerQuality; Debt and Equity; Secondary Market Focus; Financing Investment--Higher Returns 2) Primary versus Secondary Markets n PRIMARY: New Issue of Securities; Exchange of Funds for Financial Claim; Funds for Borrower; An IOU for Lender n SECONDARY: Trading Previously Issued Securities; No New Funds for Issuer; Provides Liquidity for Seller 3) Organized versus Over-the-Counter Markets n Organized: Visible Marketplace; Members Trade; Securities Listed; New YorkStock Exchange n OTC: Wired Network of Dealers; No Central, Physical Location; All Securities Traded off the Exchanges 3. Securities Traded in Financial Markets 1) Money Market Securities Debt securities only 2) Capital market securities Debt and equity securities n Debt Securities: Debt securities are contractual obligations (IOU) of debtor (borrower) to creditor (lender); Investor receives interest; Capital gain/loss when sold; Maturity date n Equity Securities: Claim with ownership rights and responsibilities; Investor receives dividends if declared; Capital gain/loss when sold; No maturity date—need market to sell 3) Derivative Securities n Financial contracts whose value is derived from the values of underlying assets n Used for hedging (risk reduction) and speculation (risk seeking) 4. Types of Financial Institutions 1) Types of Depository Financial Institutions Commercial Banks; Savings Institutions; Credit Unions 2) Types of Non-depository Financial Institutions Insurance companies; Mutual funds; Pension funds; Securities companies