Summary of FINANCIAL MARKETS (INTRODUCTION TO FINANCIAL MANAGEMENT PART3) - BUSINESS FINANCE
Main Financial Strategies and Market Analyses
Definition of Financial Markets: Financial Markets are defined as marketplaces where buyers and sellers engage in trading financial securities, including stocks and bonds.
Types of Financial Markets
- Money Market: Focuses on short-term financial instruments with high liquidity and maturities of less than a year.
- Capital Market: Involves long-term securities and investments, such as stocks and bonds with maturities exceeding one year.
- Primary Market: Where new securities are issued directly by companies to investors through public offerings or private placements.
- Secondary Market: Where previously issued securities are traded among investors, such as on stock exchanges.
- Over-the-Counter Market (OTC): A decentralized market where trading of financial instruments occurs directly between two parties without a central exchange.
- Foreign Exchange Market: Involves the trading of currencies and is crucial for international trade and investment.
Key Instruments in Financial Markets
- Money Market Instruments: Treasury bills, commercial papers, and certificates of deposit.
- Capital Market Instruments: Stocks, bonds, and other long-term securities.
Methodology or Step-by-Step Guide
- Understanding Market Types:
- Identify the type of financial market (money, capital, primary, secondary, OTC, foreign exchange).
- Assess the liquidity and maturity of financial instruments.
- Engagement in Trading:
- For new securities, participate in the Primary Market through public offerings.
- Trade existing securities in the Secondary Market.
- Utilize OTC markets for direct transactions without intermediaries.
Presenters or Sources
- Subur Jaya Warna
- Jones
- Various financial concepts and markets
Notable Quotes
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Category
Business and Finance