米什金货币金融学(商学院版)第2章课件

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– Equities – Claims to share in the net income and the assets of a business.
• Equities often make periodic payments (dividends) to their holders and have no maturity date. • Owing stock means you own a portion of the firm and thus have the right to vote on issues important to the firm and to elect its directors.
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• Two important functions of secondary markets: • They make the financial instruments more liquid. • They determine the price of the security that issuing firm sells in the primary market.
• A secondary market is a financial market in which securities that have been previously issued can be resold.
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• The main disadvantage of owning a corporation’s equities rather than its debt is that an equity holder is a residual claimant; that is ,the corporation must pay all its debt holders before it pays its equity holders • The advantage of holding equities is that equity holders benefit directly from any increases in the corporation’s profitability or asset value. • In US, the size of the debt market is often larger than the size of the equities market.
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FIGURE 1 Flows of Funds Through the Financial System
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Function of Financial Markets
• Promotes economic efficiency by producing an efficient allocation of capital, which increases production
• Directly improve the well-being of consumers by allowing them to time purchases better
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2.2.3 Exchanges and Over-theCounter (OTC) Markets
– Exchanges: buyers and sellers of securities meet in one central location to conduct trades. NYSE, Chicago Board of Trade – OTC Markets: dealers at different locations who have an inventory of securities stand ready to buy and sell securities “over the counter” to anyone who comes to them and is willing to accept their prices. A majority of the largest corporations have their shares traded at organized stock exchanges in the U.S. The U.S. government bond market , foreign exchange market are OTC markets.
short-term: less than a year.
long-term: ten years of longer intermediate-term: between one and ten years
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Chapter 2
An Overview of the Financial System
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2.1 Function of Financial Markets
• Perform the essential function of channeling funds from economic players that have saved surplus funds to those that have a shortage of funds
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பைடு நூலகம்
• (1) US Treasury Bills • Short-term debt instruments of the U.S. government • One-, three-, and six-month maturities. • Have no interest payments and are sold at a discount. • The most liquid and the safest.
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– Investment Banks underwrite securities in primary market. It guarantees an price for a corporation’s securities and then sells them to the public. – Brokers and dealers work in secondary markets funds. The New York and American stock exchanges and NASDAQ are the best-known examples of secondary markets.
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Chicago Board of Trade
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• 2.2.4 Money and Capital Markets
– Money markets deal in short-term debt instruments – Capital markets deal in longer-term debt and equity instruments.
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Shanghai Stock Exchange
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• Direct finance: borrowers borrow funds directly from lenders in financial markets by selling them securities.
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• (2) Negotiable Bank Certificates of Deposit • CD is a debt instrument sold by a bank to depositors that pays annual interest of a given amount and at maturity pays back the original purchase price. • Negotiable CDs are CDs sold in secondary markets. • An extremely important source of funds for commercial banks.
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2.2.2 Primary and Secondary Markets
• A primary market is a financial market in which new issues of a security are sold to initial buyers by the corporation or government agency borrowing the funds.
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2.2 Structure of Financial Markets
• 2.2.1 Debt and Equity Markets
– Debt instruments A bond or a mortgage, which is a contractual agreement by the borrower to pay the holder of the instrument fixed dollar amounts at regular intervals until a specified date (maturity date). Maturity: number of years (term) until that instrument’s expiration date.
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2.3 Financial Market Instruments
• 2.3.1 Money Market Instruments • Least price fluctuations and the least risky.