FINANCIAL MARKETS AND INSTITUTIONS DOCX.

Running head: FINANCIAL MARKETS AND INSTITUTIONS
Financial markets and institutions
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FINANCIAL MARKETS AND INSTITUTIONS1
Table of Contents
1. Categorizing primary or secondary market..............................................................................2
2. Identifying money market securities or capital market securities............................................2
3. Identification of various kinds of financial institutions............................................................2
4. Factors for determining nominal interest rate..........................................................................3
5. Term structure for interest rate.................................................................................................4
Reference.........................................................................................................................................5

FINANCIAL MARKETS AND INSTITUTIONS2
1. Categorizing primary or secondary market
 Supercorp issues $180 million of new common stock – secondary market
 HiTech, Inc. issues $30 million of common stock in an IPO – primary market
 Megaorg sells $10 million of HiTech preferred stock from its marketable securities
portfolio – secondary market
 The XYA Fund buys $220 million of previously issued Supercorp bonds – secondary
market
 A. B. Corporation sells $15 million of XYZ common stock – secondary market
2. Identifying money market securities or capital market securities
 U.S. Treasury bills. – money market securities
 U.S. Treasury notes – capital market securities
 U.S. Treasury bonds – capital market securities
 Mortgages – capital market securities
 Federal funds – money market securities
 Negotiable certificates of deposit – money market securities
 Common stock – capital market securities
 State and government bonds – capital market securities
 Corporate bonds – capital market securities
3. Identification of various kinds of financial institutions
 Commercial bank – it carries out tasks for the customers like deposits and offers
convenience and securities.