Professional Documents
Culture Documents
Learning Objectives
Chapter Outline
Characteristics of financial
markets
Lenders/savers/investors
Household, firms, government, foreigner
By selling securities/ instruments ( claims on
borrowers future income or asset)
FUNDS
Financial Market
Financial exchange
and instruments are
traded
Borrower/issuer
Household, firms, government, foreigner
Issue securities in order to raise funds. ( promise to make future payment.)
commercial paper,
medium-term notes,
long-term bonds and
asset-backed securities
Medium-term notes
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Weak form
The current price reflects the information contained in all past
prices.
Semi-strong form
The current price reflects the information contained not only in
past prices but all public information (including financial statements
and news reports)
Strong form
The current price reflects all information public as well as private.
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