FM 1 Assignment June 21, 2012 1. What are financial markets? 2. Define the following types of markets; a.

Physical asset market b. Financial asset market c. Spot market d. Future market e. Money market f. Capital market g. Primary market h. Secondary market i. Initial public offering market j. Private market k. Public market 3. Describe following market instruments: identify whether they belong to the money or capital market; who are the major participants of these instruments; their security characteristics in terms of: riskiness, original maturity, and interest rate. (Please follow the format below)
SECURITY CHARACTERISTICS INSTRUMENT DESCRIPTION MAJOR PARTICIPANTS riskiness original maturity interest

Treasury bills Bankers acceptance Dealer commercial paper Negotiable certificates of deposits Money market mutual funds Consumer credit loans Treasury notes and bonds Mortgages Local government bonds Corporate bonds Leases Preferred stocks Common stocks

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