Privet!
By: evilhammet • Essay • 259 Words • April 21, 2011 • 946 Views
Privet!
A financial market is a market where funds are transferred from people with an excess of funds to people with shortage of them.
A security is a claim for an asset or part of the future income.
A bond market is a security which promises to make payments periodically during some period and return initial investments after the maturity period.
The interest rate is the cost of borrowing or the price paid for rental of funds.
Example: during the 1970-1982 interest rate grow rapidly and then fell till 1993.
Ex. "Black Monday" (1987) DJIA dropped by 22%
Ex. Collapse of high-tech bubble in 2000 led to 30% decrease (stocks both!).
Ex. From 1980 to 2000 there was a great technological push up in stock market (Dow Jones Industrial Average grew from about 2000 to 12 000)
Financial System
Financial intermediates are very