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CAPITAL FLOW ANALYSIS NOTES 1. Players = Sectors a. Household b. Non Financial Corporations c. Commercial Banks d. Insurance 2.

Instruments = Assets a. Corporate Bonds b. Corporate Equities c. Mutual Fund d. Municipal Bonds 3. Capital flow = net flow 4. Motivation

PLAYERS 1. Households 2. Corporate Managers 3. Foreign Investors 4. Government officers 5. Fund Managers 6. Bankers and Brokers 7. Insurance 1-4 are Primary Players 5-7 are Intermediate Players Instruments / Assets 1. Equities 2. Agregate Securities/Mortgages 3. Funds Shows 4. Corporate Bonds 5. Treasuries 6. Municipal Bonds CFA The Basics 2 player security methods Flow of Funds 1. Red = Sellers 2. Green = Buyers Net changes over a period NOT the Volume Each Flow table has a level table Table F2 or L2 show instrument tables and show flows and

Where did the Buyers Do with the Money 5. . Difference from Flow Table to Level Table B. Type of information to explain 1. Where did the Buyers get the Money to fund the purchases 4. Knowing the Source of Buyers Funds and us of Seller Proceeds 6. A.levels for specific sectors F1 or L1 = Sector/Player Yellow = Source Blue = User of Funds Questions 1. What Significant Net purchases/sales compared to the total wealth of each sector 3. What Sectors are Buying and Selling a particular Class 2. Difference between Sectors and Instruments C.