Financial Management Didi Sundiman sundiman didigmail com didi
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Financial Management Didi Sundiman sundiman. didi@gmail. com didi. unda. ac. id Hp. 081250832204 1
Chapter 2: Financial Markets and Institutions 2
OBJECTIVES • Identify types of financial markets & institutions and • Different types of stock markets. • Explain how the stock market has performed in recent years. • why some markets are more efficient than others. 3
THE CAPITAL ALLOCATION PROCESS 4
CLASSIFY MARKETS • Physical asset markets versus financial asset markets • Spot markets versus futures markets. • Money markets versus capital markets. • Primary markets versus secondary markets. • Private markets versus public markets. 5
FINANCIAL INSTITUTIONS • Investment banks • Commercial banks • Others …p. 59 6
THE STOCK MARKET • the most active secondary market —and the most important • Physical location exchanges, NYSE, the American Stock Exchange (AMEX) • electronic dealer-based markets, which include the Nasdaq 7
THE MARKET FOR COMMON STOCK • Outstanding shares of established : the secondary market. • Additional shares sold • Initial public offerings 8
STOCK MARKETS AND RETURNS • expected and realized • Stock Market Reporting: The Wall Street Journal • Stock Market Returns, next 9
STOCK MARKET EFFICIENCY • • Market price Intrinsic value Equilibrium price Efficient market 10
STOCK MARKET EFFICIENCY 11
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