Three Main Types Of Markets For Financial Capital

Capital Market are financial markets for the buying and selling of long-term debt or equity-backed Primary Market: Investment Banking helping customers raise funds in capital markets & assets for Spot trading is one of the most common types of Forex Trading. A forex broker will charge a small fee to Derivatives are one of the three main categories of financial instruments, the other two being...Capital Market is a type of financial market for the trading of stocks (shares) and bonds. This market is used for lending or borrowing money for the long term. Here we discuss types of the financial market which include the money market, capital market, spot market, etc along with its advantages...Financial markets are very important to the economy because in the absence of them, borrowers and savers might never get together. Now that we understand the basic function of financial markets, let's look at their structure. There are several categorizations of financial marketsThe financial market in the UK is common law driven like the US, and great importance is given to laws from both local and federal courts. Within financial and commodity markets there are principally three key risks that have been recognized for many years.Question 3.a.What is the loanable funds market? b.How do firms make investment decisions? c. What determines the demand for loanable funds and what makes it change? You've reached the end of your free preview.

Financial Market (Definition, Overview) | Top 6 Types of Financial...

Financial markets are where traders buy and sell assets such as stocks, bonds, derivatives, foreign exchange, and commodities. An Introduction to the Financial Markets. Make Financial Markets Work for You. ••• Photo: Blend Images/Moxie Productions.Types of Financial Institutions:At present, the Canadian financial system has three broad categories of Types of Financial MarketsMarkets for financial assets may be classified in many ways, based on 8. Financial assets with maturities of less than a year are a) capital market instruments. b)...Financial capital (also simply known as capital or equity in finance, accounting and economics) is any economic resource measured in terms of money used by entrepreneurs and businesses to buy what they need to make their products or to provide their services to the sector of the economy upon which...Introduction to Financial Markets. Financial Market is a marketplace, where the creation and the trading The derivatives market is the financial market that trades in securities that derive their value from For example, Company XYZ Ltd. wants to raise the capital of $100,000 by the way of issuing...

Functions of Financial Markets and Financial Intermediaries

Money and Capital Markets. Many finance graduates go to work for financial institutions, including banks The three main functions in the investments area are (1) sales, (2) the analysis of Financial management is important in all types of businesses, including banks and other financial institutions...The capital structure is influenced by the likings of the potential investors. Therefore, securities of different kinds and varying denominations are issued to The structure of capital of a company is also influenced by the statutory requirements. For instance, banking companies have been prohibited by...The three main types of markets for financial capital are _. loan markets, bond markets, and stock markets. In 2017 , the Lee family had disposable income of $90 ,000, wealth of $360 ,000, and an expected future income of $90 ,000 a year. At a real interest rate of 3 percent a year...Financial markets play an important role in the mobilization of financial resources for long term investment through financial intermediation. The securities segment of the capital market complement traditional lending institutions by providing risk capital (equity) and loan capital (debt).Topic1 Introductionto Financial Market and Securities - Free download as PDF File (.pdf), Text File (.txt) or read online for free. LEARNING OUTCOMES By the end of this topic, you should be able to: 1. Explain the economics of financial market; 2. Discuss the two main types of investors; 3. Assess...

Presentation on theme: "FINANCIAL MARKETS TYPES"— Presentation transcript:

1 FINANCIAL MARKETS TYPESII Unit FINANCIAL MARKETS TYPES Dr.P.saradhamani, DoMS

2 Contents 1 Financial marketplace (Introduction) 2Relationship Between Lenders & Borrowers 2 Capital Market (Functions & Instruments) 3 Money Market (Functions & Instruments) 4 Dr.P.saradhamani, DoMS

3 Financial Market Any market the place patrons and dealers take part in the business of financial securities, commodities, and different fungible items of worth at low transaction costs and at prices that replicate supply and demand. Securities include shares and bonds, and commodities include treasured metals or agricultural items. There are each normal markets (where many commodities are traded) and specialised markets (where only one commodity is traded). In finance, financial markets facilitate: The raising of capital (in the capital markets) The switch of possibility (in the derivatives markets) Price discovery Global transactions with integration of financial markets The switch of liquidity (in the money markets) International trade (in the forex markets) Dr.P.saradhamani, DoMS

4 Securities Typically a borrower issues a receipt to the lender promising to pay again the capital. These receipts are securities that could be freely bought or offered. In go back for lending money to the borrower, the lender will expect some repayment in the form of curiosity or dividends. This return on funding is a vital section of markets to make sure that finances are equipped to them. Dr.P.saradhamani, DoMS

5 Relationship Between Lenders and BorrowersFinancial Intermediary Financial Markets Borrowers Lenders Individuals Companies Central Government Municipalities Public Corporations Banks Insurance Companies Pension Funds Mutual Interbank Stock Exchange Money Market Bond Market Foreign Exchange Individual Companies Dr.P.saradhamani, DoMS

6 Financial Market ChartDr.P.saradhamani, DoMS

7 Diagram FINANCIAL MARKET CAPITAL MARKET MONEY MARKETDr.P.saradhamani, DoMS

8 Capital Market Capital market is a marketplace for financial belongings which have a long or indefinite maturity. Unlike money marketplace tools the capital market tools become mature for the length above 12 months. The capital markets will also be divided into number one markets and secondary markets. Newly shaped (issued) securities are purchased or offered in primary markets, similar to during initial public choices. Secondary markets allow traders to buy and sell existing securities. The transactions in number one markets exist between issuers and buyers, while in secondary market transactions exist among investors These establishments play the role of lenders in the capital marketplace. Business gadgets and company are the borrowers in the capital marketplace. Dr.P.saradhamani, DoMS

9 Instrument of Capital Market1 STOCKS The marketplace through which shares are issued and traded either via exchanges or over-the-counter markets. Also known as the equity market. 2 BONDS The surroundings during which the issuance and trading of debt securities happens. The bond marketplace primarily contains government-issued securities and company debt securities. 3 DEBENTURES A certificates issued through an organization with the goal of making a debt. Debentures are in most cases unsecured by way of assets and are interest bearing securities. Four TREASURY BILLS A brief-term legal responsibility that isn't interest-bearing (it is bought at a discount); may also be traded on a cut price basis for 91 days 5 FOREIGN EXCHANGE The market through which participants are in a position to shop for, promote, change and speculate on currencies. 6 FIXED DEPOSITS FDs are the deposits that are repayable on mounted maturity date at the side of the foremost and agreed rate of interest for the length. Dr.P.saradhamani, DoMS

10 Role Of Capital Market Mobilization of Savings : Capital marketplace is an important supply for mobilizing idle savings from the economy. It mobilizes budget from other people for additional investments in the productive channels of an economic system. Capital Formation : Capital market is helping in capital formation. Capital formation is web addition to the present inventory of capital in the economic system. Provision of Investment Avenue : Capital marketplace raises resources for longer classes of time. Thus it provides an investment street for individuals who wish to invest resources for an extended duration of time. Speed up Economic Growth and Development : Capital market complements production and productivity in the national financial system by generation of employment and building of infrastructure. Service Provision : As a very powerful financial set up capital marketplace supplies various types of products and services. It contains long run and medium term loans to trade, underwriting services, consultancy services, export finance, and many others. These services and products help the production sector in a large spectrum. Dr.P.saradhamani, DoMS

11 Money Market As cash turned into a commodity, the cash marketplace became a component of the financial markets for belongings serious about temporary borrowing, lending, purchasing and selling with unique maturities of 12 months or less. Trading in the money markets is completed over the counter, is wholesale. Dr.P.saradhamani, DoMS

12 Organised Money MarketMain elements of Organised Money Market: The Call Money: Here, lending and borrowing transactions are carried out for sooner or later. The Treasury Bill Market: It offers in Treasury Bills of brief time period period: 14 days, ninety one days, 182 days and 364 days. They are issued through Government and largely held by way of RBI. The Commercial Bill Market: It offers in bills of change. A dealer attracts a invoice of trade on the purchaser to make payment inside a undeniable duration of time. The Certificate of Deposit Market:The main purpose of CD is to allow the industrial banks to boost funds from the marketplace. The CDs adulthood period ranges from 7 days to one yr (in case of FIs minimum 1 yr and most Three years). The CDs are issued at a bargain to its face worth. The CDs are issued in denomination of Rs. 1 lakh and thereafter, multiples of Rs. 1 lakh. Money Market Mutual Funds (MMMFs): The MMMFs were presented in The function of MMMFs is to supply an additional short term street to the person buyers. Dr.P.saradhamani, DoMS

13 Unorganised Money MarketMain elements of Unorganised Money Market: Indigenous Bankers (IBs): The IBs are people or personal corporations who obtain deposits and provides loans and thereby they operate as banks. Unlike moneylenders who best lend cash, IBs accept deposits in addition to lend money. Money Lenders (MLs):They lend cash in rural spaces as well as city spaces. They generally price an invariably high price of curiosity ranging between 15% p.a. to 50% p.a. and even more. Chit Funds and Nidhis: They collect budget from the participants for the goal of lending to participants (who are in need of funds) for private or other functions. Finance Brokers: They act as middlemen between lenders and borrowers. They rate fee for their services and products. Finance Companies: They perform all the way through the country. They borrow or accept deposits and lend them to others. They supply funds to small traders and others. They function like indigenous bankers. Dr.P.saradhamani, DoMS

14 Money Market InstrumentsCertificates of Deposit Bill rediscounting Commercial Paper Inter-bank participation certificates Treasury Bills Inter-bank term cash Instruments Dr.P.saradhamani, DoMS

15 THANK YOU Dr.P.saradhamani, DoMS