By issuance: primary vs. secondary markets By trading location: organized/centralized exchange(场内交易市场) vs. over-thecounter(OTC) markets(场外交易/柜台交易市场) By maturity: money vs. capital markets By time of delivery: spot(即期市场) vs. futures markets(期货市场)
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Financial markets perform the essential economic function of channeling funds from people who have saved surplus funds by spending less than their income to people who have a shortage of funds because they wish to spend more than their income.
lender-savers:贷款-储蓄者; borrower-spenders:借款-支出者 The most important borrower spenders are businesses and the government (particularly the federal government), but households and foreigners also borrow to finance their purchases of cars, furniture, and houses.
Chapter 3
Financial Markets
Financial markets

Financial markets: broad market where
various types of financial asset/securities are purchased/sold.
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The principal lender savers are households, but business enterprises and the government (particularly state and local government), as well as foreigners and their governments, sometimes also find themselves with excess funds and also lend them out.
be claims on: 对…的要求权


eg: if General Motors needs +to borrow funds to pay for a new factory to manufacture computerized car, it might borrow the funds from a saver by selling the saver a bond, a debt security that promises to make payments periodically for a specified period of time.
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Classification By types of financial assets

Stock/equity markets; Bond markets; Consumer credit markets; Insurance market; Foreign exchange market; Mortgage market; Derivative market
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Purpose: Facilitate investments and purchases of financial assets. Facilitate handing of various risks.
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Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
11a debt instrument is the time (term) to that instrument’s expiration date. A debt instrument is short-term if its maturity is less than a year and long-term if its maturity is ten years or longer. Debt instruments with a maturity between one and ten years are said to be intermediateterm.
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Those who have saved and are lending funds are called the lender-savers, and those who must borrow funds to finance their spending are called the borrower-spenders.
Time: v. to arrange that something should happen at a particular time: 安排某事在一个特定的时间发生； time their purchases better：更好的安排购买时机 eg: I saw from the station clock that I had timed my arrival perfectly. (time my arrival perfectly:更好的安排我到达的时间)
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Flows of funds through the financial system
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Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 10
Structure of Financial Markets
Debt and Equity Markets 债务和股权市场

A firm or an individual can obtain funds in a financial market in two ways. The most common method is to issue a debt instrument, such as 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 (interest and principal payments) until a specified date (the maturity date), when a final payment is made.
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The second method of raising funds is by issuing equities, such as common stock, which are claims to share in the net income (income after expenses and taxes) and the assets of a business. If you own one share of common stock in a company that has issued one million shares, you are entitled to 1 onemillionth of the firm‘ s net income and 1 onemillionth of the firm’s assets. Equities usually make periodic payments (dividends) to their holders and are considered long-term securities because they have no maturity date.
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They also directly improve the well-being of consumers by allowing them to time their purchases better. They provide funds to young people to buy what they need and can eventually afford without forcing them to wait until they have saved up the entire purchase price. Financial markets that are operating efficiently improve the economic welfare of everyone in the society.