tailieunhanh - Lecture Fundamentals of finance management (10/E) - Chapter 4: The financial environment - Markets, institutions, and interest rates

Lecture "Fundamentals of finance management (10/E) - Chapter 4: The financial environment - Markets, institutions, and interest rates" has contents: Financial markets, types of financial institutions, determinants of interest rates, yield curves. | CHAPTER 4 The Financial Environment: Markets, Institutions, and Interest Rates Financial markets Types of financial institutions Determinants of interest rates Yield curves What is a market? A market is a venue where goods and services are exchanged. A financial market is a place where individuals and organizations wanting to borrow funds are brought together with those having a surplus of funds. Types of financial markets Physical assets vs. Financial assets Money vs. Capital Primary vs. Secondary Spot vs. Futures Public vs. Private How is capital transferred between savers and borrowers? Direct transfers Investment banking house Financial intermediaries Types of financial intermediaries Commercial banks Savings and loan associations Mutual savings banks Credit unions Pension funds Life insurance companies Mutual funds Physical location stock exchanges vs. Electronic dealer-based markets Auction market vs. Dealer market (Exchanges vs. OTC) NYSE vs. Nasdaq Differences are narrowing The cost of money The price, or cost, of debt capital is the interest rate. The price, or cost, of equity capital is the required return. The required return investors expect is composed of compensation in the form of dividends and capital gains. What four factors affect the cost of money? Production opportunities Time preferences for consumption Risk Expected inflation “Nominal” vs. “Real” rates k = represents any nominal rate k* = represents the “real” risk-free rate of interest. Like a T-bill rate, if there was no inflation. Typically ranges from 1% to 4% per year. kRF = represents the rate of interest on Treasury securities. Determinants of interest rates k = k* + IP + DRP + LP + MRP k = required return on a debt security k* = real risk-free rate of interest IP = inflation premium DRP = default risk premium LP = liquidity premium MRP = maturity risk premium Premiums added to k* for different types of debt IP MRP DRP LP S-T Treasury L-T Treasury S-T Corporate L-T Corporate | CHAPTER 4 The Financial Environment: Markets, Institutions, and Interest Rates Financial markets Types of financial institutions Determinants of interest rates Yield curves What is a market? A market is a venue where goods and services are exchanged. A financial market is a place where individuals and organizations wanting to borrow funds are brought together with those having a surplus of funds. Types of financial markets Physical assets vs. Financial assets Money vs. Capital Primary vs. Secondary Spot vs. Futures Public vs. Private How is capital transferred between savers and borrowers? Direct transfers Investment banking house Financial intermediaries Types of financial intermediaries Commercial banks Savings and loan associations Mutual savings banks Credit unions Pension funds Life insurance companies Mutual funds Physical location stock exchanges vs. Electronic dealer-based markets Auction market vs. Dealer market (Exchanges vs. OTC) NYSE vs. Nasdaq Differences are narrowing .

• Tài chính doanh nghiệp
• Finance management
• Fundamentals of finance management
• The financial environment
• Interest rates
• Financial markets
• Financial institutions
• Yield curves
• Risk management
• Derivatives and risk management
• Derivative securities
• Fundamentals of risk management
• Using derivatives
• Managing current assets
• Alternative working capital policies
• Cash management
• Inventory management
• Accounts receivable management
• Business finance
• Lecture Business finance
• Capital market
• Sources of finance
• Financial management
• Management of short term assets
• Leasing finance
• Sources of long term finance
• Long term finance
• Equipment finance
• Corporate finance
• Essentials of corporate finance
• Business organisation
• Working capital management
• International financial management
• Intermediate corporate finance
• Lecture Intermediate corporate finance
• Tài chính doanh nghiệp
• Accounting for financial management
• Career opportunities
• Capital markets
• The corporation
• Agency relationships
• Issues of the new millennium
• International money
• Orange juice project
• Determining profitability
• Ordinary shares
• Long term debt
• Foreign exchange markets
• Exchange rates