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TYPES OF FINANCIAL MARKETS

FINANCIAL MARKET DEFINATION:

A market where securities are sold and purchased called financial market.

Types of Financial Markets


Primary Market:

When a company issue its securities first time in the market that market is called primary market.

Secondary Market:

The market where issued securities are sold and purchased is called secondary market.

Money Market:

A market where securities who's maturity are less than or equal to one year are sold and purchased are called money market.

a) T bill
T bill are issued by Govt. when they need the money and Govt mostly issue T bill when thsre budget is going to budget is deficit or have. These securities maturity is less than one year and Govt. can issue in any country.Its a less risky investment.

b) Commercial Paper
Commercial paper are issued by companies. These types of securiteis issue mostly that company that have high credit worthiness in market and goodwill in the market. These types of investment are risky investment.

c) Banker Acceptance
A security issue by company and who's gruanty is given by the bank is called banker acceptance. Mostly that companies uesed this way that have not goodwill in market or enter in new market. These are less risky investment than commercial paper.

Capital Market:

The market where securites who's Maturity are more than one year are sold and purchased is called capital market.

a) Bonds
A bond is a Security issue by a company or Govt. for getting the long term finance

BONDS
DEBENTURE
Secure bonds
Unsecure bonds
Company pledge its assets before issue of its bonds
Company cannot pledge its assets against bonds
New company
Old company
Un-risky
risky

b) Shares
Shares are the securities issue by the company for getting the finance.

Two types of share issued by company
Preferred shares
Common share
Fixed dividend
Not fix dividend
Claim on assets
Not claim on assets
No nothing right
Voting right
Less risky
More risky

Over the Counter Market (OTC):

This market exists every where in the country. In this market the sold and purchased of the securities are done through electronic media through internet. that market have no physical existance.


FINANCIAL MANAGEMENT
DECISION AREA OF FINANCIAL MANAGEMENT
AGENCY PROBLEM
TYPES OF BUSINESS
FINANCIAL SYSTEM
FINANCIAL INTERMEDIARIES
TYPES OF FINANCIAL MARKETS
TIME VALUE OF MONEY
EXAMPLES AND FORMULA TIME VALUE OF MONEY
CASH FLOW,SUM,SERIES OF CASH, ANNUITY AND MIX STREAM
ANNUITY TYPES AND FORMULA
AMORTIZATION SCHEDULE OR TABLE WITH EXAMPLE
EFFECTIVE INTEREST RATE WITH EXAMPLE
VALUATION OF LONG TERM SECURITIES (BONDS)
TYPES OF BONDS
BONDS FORMULA,ZERO COUPON PERPETUAL
VALUATION OF LONG TERM SECURITIES (SHARE)
CASH AND MARKETABLE SECURITIES MANAGEMENT
MANAGING CASH INFLOW AND OUTFLOW
SECURITIES MANAGEMENT
SHORT TERM FINANCING
SPONTANEOUS LABILITIES
NEGOTIATED FINANCE
CAPITAL BUDGETING
CAPITAL BUDGETING TECHNIQUE
NET PRESENT VALUE TECHNIQUE
INTERNAL RATE OF RETURN TECHNIQUE
ACCOUNT RECEIVABLE MANAGEMENT
INVENTORY MANAGEMENT
FORCASTING

MBA NOTES FINANCIAL MANAGEMENT
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