finance discussion question and need guidance to help me learn.
CAPITAL MAKET
1.Financial markets are structures through which funds flow.They are the institutions and systems that facilitate transactions in all types of financial claims.
2.A financial claim entitles a creditor to receive payment from a debtor in circumstances specified in a contract between them, oral or written.
3.Primary markets are markets in which users of funds (corporations , for example) raises funds through new issues of financial instruments such as stocks and bonds. They consist of underwriters, issuers, and instruments involved in buying and selling original or new issues of securities referred to as primary securities.
4. Primary market issues are generally for public offerringsor publicly traded securities like stocks of companies already selling stocks in the stock market or stock exchange.First-time issues for the public are called initial public offerings or IPO.
5.Rather than a public offering, primary market sales can take the form of a private placement, particularly for closed corporations, that is, corporations whose stocks are only sold to family or a few close friends, relatives, and some other private individuals.
6.Secondary markets are markets for currently outstanding securities, referred to as secondary securities. All transactions after the initial issue in the primary market are done in the secondary markets. Secondary markets, only transfer ownership, but do not affect the total outstanding shares or securities in the market.
7.Money markets cover markets for short-term debt instruments usually issued by companies with high credit standing.They consist of a network of instruments and facilities for trading debt securities only with a maturity of one-year or less.
8.Banks with temporary cash surpluses led commercial banks to set up the money market as an auction house for excess reserves. It is called the interbank call market, a money market.
9.The Philippine government issues four kinds of government securities (GS):cash management bills, Treasury bills, Treasury notes, and Treasury Bonds
10.Treasury Bills (T-Bills) are govt securities which mature in less than a year.There are three tenors of T-bills: 91-day, 182-day and 364-day bills
11.Capital markets are markets for long-term securities.Long term securities are either debt securities (notes, bonds, mortgages, or leases) or equity securities (stocks)
12.Securities market is where companies issue common stocks or bonds that are marketable / negotiable to obtain long-term funds.An instrument which is transferable by endorsement or delivery is negotiable.
13.Stock market serves as the medium or agent of exchange transactions that deals with equity securities or stocks.
14.Bond market is the market where bonds are issued and traded.Bond markets are generally classified into Treasury notes and bonds market, municipal bonds market, and corporate bonds market.
15.Derivative securities market refers to the market where derivative securities are TRADED ????
16.Capital markets and money markets include the exchange where the securities and financial instruments are traded or sold.These exchanges can be formally organized or informally organized.
17.The negotiated or non-securities market includes, but is not limited to loss………… mortgagemarket, and lease market.Loan market is where a one-on-one transactions takes place between a borrower and a lender.Mortgage market is where a real……. Building , and big machineries, are used to guarantee or secure big loans.Lease……. Is here equipment , building, or other property is being leased/rented out ato another party.
18.Auction market is where the trading is done by an independent third party matching price on orders received to buy and sell a particular security.
19.Foreign exchange market provides the physical and institutional structure through which the money of one country is exchanges to the money of another country, the rate of exchange between currencies is determined and foreign exchange transactions are physically completed.
20.Futures market is where contracts are originated and traded that give the holder right to buy something in the future at a price specified in the contract.
21.Forward contracts are contractual agreements between a buyer and a seller at time ………. Exchange a pre-specified, non-standardized asset for cash at some later date.
22.Options market is where stock options, the right to buy stocks, are traded.Options are called warrants if they are issued by corporations, and calls if they are issued by individuals.
23.Swaps are agreements between two parties in exchanging specified periodic cash flows in the future based on an underlying instrument or price.
24.The third market comprises OTC transactions between broker-dealers and large institutions.The fourth market is made up of transactions that take place between large institutions.
25.Investors are generally classified as bulls, bears, chickens, or pigs.
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