Financial Markets and Institutions参考.ppt

* * * ? 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part. ? 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part. ? 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part. Financial Markets and Institutions The Capital Allocation Process Financial Markets Financial Institutions Stock Markets and Returns Stock Market Efficiency Chapter 2 2-1 The Capital Allocation Process In a well-functioning economy, capital flows efficiently from those who supply capital to those who demand it. Suppliers of capital: individuals and institutions with “excess funds.” These groups are saving money and looking for a rate of return on their investment. Demanders or users of capital: individuals and institutions who need to raise funds to finance their investment opportunities. These groups are willing to pay a rate of return on the capital they borrow. 2-* How is capital transferred between savers and borrowers? 2-* Direct transfers Investment banks Financial intermediaries What is a 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. 2-* Types of Financial Markets Physical assets vs. Financial assets Spot vs. Futures Money vs. Capital Primary vs. Secondary Public vs. Private 2-* The Importance of Financial Markets Well-functioning financial markets facilitate the flow of capital from investors to the users of capital. Markets provide savers with returns on their money saved/invested, which provide them money in the future. Markets provide users of capital with the necessary funds to finance their investment projects. Well-func