8/27/13 Overview of Financial System * Financial market players: 1. Households 2. Firms‚ which issue stocks and bonds 3. Governments 4. Foreigners * Financial market- a place or channel for buying stocks‚ bonds‚ and other securities 1. Functions of financial markets: a. You have the money b. You can borrow from friends‚ banks‚ etc. c. Get funds in exchange of partnership d. Transferring funds: Savers and spenders (send) (borrow) Financial
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CONFESSIONS of a S-Chip CEO (unabridged) |[pic] |[pic] | | |Written by S-chip CEO | |Saturday‚ 25 April 2009 | | | |A fascinating email circulated around yesterday purportedly from the CEO
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and the people who are in need of funds. A financial system facilitates the movement of funds from the areas of surplus to the areas of deficit. A Financial System is a composition of various financial institutions (such as banks)‚ markets (such as stock markets)‚ regulatory bodies (such as RBI) and depositors (majorly common public). Financial Markets Financial markets are the places where financial assets are created and/or transferred. Financial transactions involve creation of a financial asset
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East India Company (founded in 1602) was the first joint-stock company to get a fixed capital stock and as a result‚ continuous trade in company stock occurred on the Amsterdam Exchange. Soon thereafter‚ a lively trade in various derivatives‚ among which options and repos‚ emerged on the Amsterdam market. Dutch traders also pioneered short selling - a practice which was banned by the Dutch authorities as early as 1610.[8] There are now stock markets in virtually every developed and most developing
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focuses on making sure that investors are fully informed about their purchases‚ transactions‚ affairs of the company that they have invested in and the like. SEBI had issued guidelines for the protection of the investors through the Securities and Exchange Board of India (Disclosure and Investor Protection) Guidelines‚ 2000. The measures in practice gave mixed results. On the positive front‚ many banks sponsored mutual fund had launched assured return schemes and lured the investor ’s huge contribution
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The Bank for International Settlements (Bank for International Settlements‚ BIS) is the oldest international financial institution in the world‚ having been in operation since 1930. With its headquarters in Basel‚ Switzerland‚ the BIS assists central banks regarding the investment of cash reserves‚ provides a forum for international monetary cooperation‚ acting as agent or trustee in the execution of international loan agreements‚ and engages in extensive economic research. The BIS is involved
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the contribution of money market to the growth of small and medium scale enterprises during the period of 1987-2007 with special emphasis on the performance appraisal of the stock market. The result from the empirical analysis carried out using the ordinary least squares estimation technique reveals that the Nigeria stock exchange has contributed to some extent in financing small and medium scale enterprises. However‚ the prospect of the market appears to be bright considering the current position of
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Chapter 2 Overview of the Financial System 2.1 Multiple Choice Questions 1) Every financial market has the following characteristic: A) It determines the level of interest rates. B) It allows common stock to be traded. C) It allows loans to be made. D) It channels funds from lenders-savers to borrowers-spenders. Answer: D 2) Financial markets have the basic function of A) bringing together people with funds to lend and people who want to borrow funds. B) assuring that the swings in the business
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consume amounts different from our current incomes by providing mechanism that help us transfer income though time When we borrow‚ for example‚ we sacrifice future income to increase current income; when we save‚ or invest‚ we sacrifice current exchange for grater expected income in the future Funds are transferred (flow) from those with surplus (savers) to those with needs a business (borrowers) by the three different process : Direct transfer Transfer through an Investment Banker Transfer
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secondary market can be either a physical location exchange or a computer/ telephone network. For example‚ the New York Stock Exchange‚ the American Stock Exchange (AMEX)‚ the Chicago Board of Trade (the CBOT trades futures and options)‚ and the Tokyo Stock Exchange are all physical location exchanges. In other words‚ the traders actually meet and trade in a specific part of a specific building. In contrast‚ Nasdaq‚ which trades a number of U.S. stocks‚ is a network of linked computers. Other network
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