FINC314 Lecture Notes - Lecture 1: Currency Swap, The American Economic Review, Mortgage Bank

• School: University of Delaware
• Department: Finance
• Course: FINC314
• Professor: Danby Peter

Document Summary

In this first exploratory note of the evening and of the course, we examine the following: the fundamentals of financial markets (purpose, definitions, benefits, etc. ), the basics of financial institutions (purpose, definitions, benefits, etc. ), and the importance of markets when it comes to the critical issue of resource allocation. This exploratory note and the one which follows a little bit later have been adapted from a lecture that i gave in finc855 financial markets and institutions a year or so ago. General overview of the investment environment - financial markets. A critical definition: financial markets are structures or mechanisms of exchange through which funds flow from those with a surplus (suppliers of funds) to those with a deficit (users of funds). Financial markets are driven by supply and demand. There are four primary market classifications (other taxonomies are possible, but the textbook"s is reasonable): Have an original maturity of less than one year.