Markets And Instruments

This chapter covers a range of financial securities and the markets in which they trade. Our goal is to introduce you to the features of various security types. This foundation will be necessary to understand the more analytic material that follows in later chapters. Financial markets are traditionally segmented into money markets and capital markets. Money market instruments include short-term, marketable, liquid, low-risk debt securities. Money market instruments sometimes are called cash equivalents, or just cash for short. Capital markets, in contrast, include longer-term and riskier securities. Securities in the capital market are much more diverse than those found within the money market. For this reason, we will subdivide the capital market into four segments: longer-term bond markets, equity markets, and the derivative markets for options and futures. We first describe money market instruments and how to measure their yields. We then move on to debt and equity securities. We explain the structure of various stock market indexes in this chapter because market benchmark portfolios play an important role in portfolio construction and evaluation. Finally, we survey the derivative security markets for options and futures contracts.

28 PART I Introduction

Get Out Of Debt Free

Get Out Of Debt Free

Debt is a major issue for a  lot of individuals these days. The issue is, even if they know they want to get out of it, they have a difficult time figuring out how to begin. Now, there isn’t one way to get out of debt, and the most beneficial program ought to be tailored to each person’s individual state of affairs.

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