Business Finance
Chapter 2 The Role of Financial Markets and Financial Intermediaries
2.1 Financial Markets
Financial Markets - Business Finance - ثاني ثانوي
PART 1
Chapter 1 An Introduction to Basic Finance
Chapter 2 The Role of Financial Markets and Financial Intermediaries
Chapter 3 Analysis of Financial Statements
PART 2
Chapter 4 An Introduction to Financial Markets
Chapter 5 Opportunity Costs and the Time Value of Money
Chapter 6 Risk and Its Measurements
Chapter 7 Stock and Bonds
Financial Markets
Financial markets perform two exceedingly important functions.
What are the benefits of having a single currency in a country?
2.1a The Role of Money
FIGURE 2.2 Currency Conversion
Money
Banknote
While you may store value in these nonmonetary assets,
Measures of the Supply of Money
Liquidity
Money supply
M-1
M-2
FIGURE 2.3 Comparison of M-1 and M-2 Measures of Money Supply
2.1b The Role of Interest Rates
Debt, and hence interest rates, is often classified
The Term Structure of Interest Rates
Term structure of interest rates
Yield curve
FIGURE 2.4 Example of a Positively Sloped Yield Curve
FIGURE 2.5 Example of a Negatively Sloped Yield Curve
FI G U R E 2.6 Example of a Flat Yield Curve
2.1c Financial Markets and the Transfer of Savings
When somebody spends their income, the funds
