FINANCIAL MARKETS amp; INSTITUTIONS - Home The …金融市场和机构-家….docVIP

Lecture #1 BUSINESS CYCLES There is more or less a pattern of expansion (recovery) and contraction (recession) in economic activity around the path of trend growth. At cyclical peak- economic activity is high relative to trend. At cyclical trough ?? Over time what causes the trend line to change ? More resources Factors not fully employed all the time. What is inflation ? Why worry about inflation instead of unempmt.? Lecture #2 MARKETS What are they ?? What makes a good market ?? Can we name some “bad” markets ?? FINANCIAL MARKETS INSTITUTIONS Financial markets exist to aid in the most efficient allocation of capital Financial Institutions facilitate this allocation of capital. The players in the market are households, businesses and governments. How they play and what motivates them to play is critical to the well being of economies. TYPES OF MARKETS Primary – New fund raising Secondary – Trading There are specialized markets for fund raising and trading. The most important of these are: Money Markets – Maturities 1 yr. Capital Markets – Maturities 1 yr. Lecture #3 FLOW OF FUNDS Who are the players? Households Businesses Governments Rest of the World All act at one point in time or another as borrowers and providers. Funds arrive directly or indirectly What is the role of Financial Intermediaries ? To lower transaction costs To lower risk To provide better market information Intermediaries also incur risks……… I/R risk FX risk Credit or default risk What about Foreign Mkts Intermediaries ? Provide for borrowing or investing abroad Important source of diversification Lecture #4 What is an interest rate ? Compensation for lending or giving up one’s abilitiy to spend today. Can be a measuring guideline governing corportate investing. Why do we care about interest rates ? They influence the allocation of capital. They impact the economy and decision making. How d