01:220:301 Lecture Notes - Lecture 2: Commercial Paper, Eurodollar, United States Treasury Security
Document Summary
Figure 1 flows of funds through the financial system. Structure of financial markets: debt and equity markets. [the maturity of a debt instrument is the number of years (term) until that instrument"s expiration date. A debt instrument is short-term if its maturity is less than a year and long-term if its maturity is ten years or longer. Debt instruments with a maturity between one and ten years are said to be intermediate-term. ] Equities (dividends ): stock market (sharing ownership). Government can only raising money by selling bound etc: primary and secondary markets. [a primary market is a financial market in which new issues of a security, such as a bond or a stock, are sold to initial buyers by the corporation or government agency borrowing the funds. ] Brokers and dealers work in secondary markets. [a secondary market is a financial market in which securities that have been previously issued can be resold. ]
