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Table 1 Principal Money Market Instruments
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• Direct finance: borrowers borrow funds directly from lenders in financial markets by selling them securities.
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– OTC Markets: Foreign exchange, Federal funds.
• Money and Capital Markets
– Money markets deal in short-term debt instruments
– Capital markets deal in longer-term debt and equity instruments.
• Debt and Equity（股本） Markets
– Debt instruments (maturity) – Equities (dividends股息)
• Primary and Secondary Markets
– Investment Banks underwrite securities in primary markets
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Structure of Financial Markets
• Exchanges and Over-the-Counter (OTC) Markets
– Exchanges: NYSE, Chicago Board of Trade
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Function of Financial Markets
• Promotes economic efficiency by producing an efficient allocation of capital, which increases production
Finance • Regulation of the Financial System
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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
• Directly improve the well-being of consumers by allowing them to time purchases better
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Structure of Financial Markets
Copyright © 2010 Pearson Education. All rights rFunction of Financial Markets • Structure of Financial Markets • Principal Money Market Instruments • Internationalization of Financial Markets • Function of Financial Intermediaries: Indirect
Preview
Inez the Inventor has designed a low-cost robot that cleans house (even does windows), washes the car, and mows the lawn, but she has no funds to put her Wonderful invention into production. Walter the Widower has plenty of savings, which he and his wife accumulated over the years. If Inez and Walter could get together so that Walter could provide funds to Inez, Inez's robot would see the light of day, and the economy would be better off: We would have cleaner houses , shinier cars , and more beautiful lawns.
– Brokers and dealers work in secondary markets
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• 债券溢价（bond premium）是债券价格大于票面 价值的差额，债券溢价受两个方面的因素影响，一 是受市场利率的影响、二十首债券兑付期的影响， 离兑付期越近，购买债券所支付的款项就越多，溢 价就越高。