FIN010: Capital Markets

Student Activity Sheet Module #4

Name: _________________________________________________________________ Class number: _______

Section: ____________ Schedule: _______________________________________ Date: ________________

Lesson title: Classification of Financial Markets Part 2 Materials:

Lesson Objectives: SAS
At the end of this module, I should be able to: References:
1. Define the different kinds of financial markets. www.investopedia.com
2. Explain kinds of financial markets such as stock market,
mortgage market, consumer credit market, auction
market, negotiation market and organized market.

Productivity Tip:
After finishing this module, write some tips on what helped you learn on your student activity sheet
under Thinking About Learning.

A. LESSON PREVIEW/REVIEW

1) Introduction

Last session, you learned the first five classification of financial markets namely, primary market,
secondary market, money market, capital market and bond market. This session is the
continuation of your previous module about kinds of financial markets. But before you move on to
the next kinds, answer the activity below by thinking of a word/s that is associated with the
classifications of the financial market by writing it in the space below.

Kinds of Financial Market

Primary Market Secondary Market Money Market Capital Market Bond Market

Good job! You truly understand our past lessons. Now, we will be tackling the other classifications of the
financial market.

This document is the property of PHINMA EDUCATION

 FIN010: Capital Markets
Student Activity Sheet Module #4

Name: _________________________________________________________________ Class number: _______

Section: ____________ Schedule: _______________________________________ Date: ________________

B.MAIN LESSON

1) Activity 1: Content Notes (20 minutes)

Classification of Financial Markets

Stock Market
Stock market is an organized activity involving the buying and/or selling of securities done
within a stock exchange. Also, it is a financial market where the common and preferred
stocks issued by corporations are traded.

What is the difference between common and preferred stocks?

● Preferred stock gives no voting rights to shareholders while common stocks have.
● Preferred shareholders have priority over a company’s income, meaning they are paid
dividends before common shareholders.
● Common stockholders are last in line when it comes to company assets, which means
they will be paid out after creditors, bondholders, and preferred shareholders.

Mortgage Market
It is a market for loans to people and organizations buying property, a market for
mortgages that have been bought by financial institutions (i.e. banks) and are then traded
as asset-backed securities.

Consumer Credit Market

It is a market where personal debt is taken on to purchase goods and services. It is usually
involved in loans on autos, appliances, education, travel, etc. Example is the credit card.

Auction Market
It is a market in which buyers enter competitive bids and sellers enters competitive offers at the
same time. The price a stock is traded represents the highest price that a buyer is willing to pay
and the lowest price a seller is willing to sell at.

Negotiation Market
When buyers and sellers of securities negotiate with each other regarding price and volume,
either directly or through broker to dealers, they are engaged in the negotiation market. Through
it, the situation wherein securities are not frequently traded and which are in large volumes may
not be readily accommodated in the auction market for lack of time is remedied.

Organized Market
It is a specific place in which buyers and sellers meet to trade according to the agreed rules and
procedures (Oxford). Example is the Philippine Stock Exchange (PSE).

This document is the property of PHINMA EDUCATION

 FIN010: Capital Markets
Student Activity Sheet Module #4

Name: _________________________________________________________________ Class number: _______

Section: ____________ Schedule: _______________________________________ Date: ________________

2) Activity 2: Skill-building Activities (23 minutes + 2 minutes checking)

Let’s test your knowledge about the concept! After completing each exercise, you may refer to the
Key to Corrections for feedback. Try to complete each exercise before looking at the feedback.

Exercise 1

Directions: Look at the pool of words below. Circle at least five kinds of financial market that you
first saw and define it in the space provided below.

O O P T I O N S Z F O

V F O R E I E G J O H

E Z Z X V I G O S R O

R A U C T I O N D E P

T Q S O B N T T F I T

H A P R S T I R H G I

E A O G M O A N B N N

C U S S P O T E R O S

O T T G T Y I I D R E

U R F A P N O G P G I

N F O R G A N I Z E D

T U T N O I D F O A H

E T F U T U R E S N G

R U S I T Z S T Y I D

This document is the property of PHINMA EDUCATION

 FIN010: Capital Markets
Student Activity Sheet Module #4

Name: _________________________________________________________________ Class number: _______

Section: ____________ Schedule: _______________________________________ Date: ________________

Kinds of Market Definition

3) Activity 3: Check for Understanding (5 mins)

After completing each exercise, you may refer to the Key to Corrections for feedback. Try to
complete each exercise before looking at the feedback.

This document is the property of PHINMA EDUCATION

 FIN010: Capital Markets
Student Activity Sheet Module #4

Name: _________________________________________________________________ Class number: _______

Section: ____________ Schedule: _______________________________________ Date: ________________

Directions: Choose the best answer. Write your answers on the space provided.
_____1. The markets dealing with residential loans, industry real estate loans, agricultural
loans and commercial loans are called _____.
a. Residential markets
b. Mortgage markets
c. Agriculture markets
d. Commercial markets

_____2. The markets which bring closer the institutions needing funds and with the surplus
funds are classified as _____.
a. Financial markets
b. Corporate institutions
c. Hedge firms
d. Retirement planners

_____3. The markets in which corporations raise capital for creating market transactions are
classified as _____.
a. Commercial markets
b. Residential markets
c. Primary markets
d. Consumer credit loans

_____4. The notes, mortgages, bonds, stocks, treasury bills and consumer loans are classified
as _____.
a. Financial instruments
b. Capital assets
c. Primary assets
d. Competitive instruments

_____5. Markets which deals with long-term corporate stocks are classified as
a. Liquid markets
b. Short-term markets
c. Capital markets
d. Money markets

This document is the property of PHINMA EDUCATION

 FIN010: Capital Markets
Student Activity Sheet Module #4

Name: _________________________________________________________________ Class number: _______

Section: ____________ Schedule: _______________________________________ Date: ________________

C. LESSON WRAP-UP

1) Activity 4: Thinking about Learning

Congratulations for finishing this module! Shade the number of the module that you finished.

Did you have challenges learning the concepts in this module? If none, which parts of the module helped
you learn the concepts?
_____________________________________________________________________________________________________________
_____________________________________________________________________________________________________________
Some question/s I want to ask my teacher about this module is/are: ______________________________________
_____________________________________________________________________________________________________________

FAQs
1. What products are most commonly traded in an over-the-counter market?
Some of the products most commonly traded over-the-counter include bonds, derivatives,
structured products and currencies.

2. How does futures contract work?

It allows players to secure a specific price and protect against the possibility of wild price change
(up or down) ahead.

KEY TO CORRECTIONS

Answers to Lesson Preview/Review

Kinds of Financial Market

This document is the property of PHINMA EDUCATION

 FIN010: Capital Markets
Student Activity Sheet Module #4

Name: _________________________________________________________________ Class number: _______

Section: ____________ Schedule: _______________________________________ Date: ________________

Seconda
Primary Money Capital Bond
ry
Market Market Market Market
Market

New Short-ter Long-ter Governme

IPO
investors m m nt

Answers to Skill-Building Exercises

Exercise 1

O O P T I O N S Z F O

V F O R E I E G J O H

E Z Z X V I G O S R O

R A U C T I O N D E P

T Q S O B N T T F I T

H A P R S T I R H G I

E A O G M O A N B N N

C U S S P O T E R O S

O T T G T Y I I D R E

U R F A P N O G P G I

N F O R G A N I Z E D

T U T N O I D F O A H

E T F U T U R E S N G

R U S I T Z S T Y I D

This document is the property of PHINMA EDUCATION

 FIN010: Capital Markets
Student Activity Sheet Module #4

Name: _________________________________________________________________ Class number: _______

Section: ____________ Schedule: _______________________________________ Date: ________________

Kinds of Market Definition

Auction It is a market in which buyers enter competitive bids and sellers enter
competitive offers at the same time.

Negotiation It is a type of secondary market exchange in which the prices of each

security are bargained out between buyers and sellers.

Organized It is a market in a specific place in which buyers and sellers meet to trade
according to agreed rules and procedures.

Over-the-Counter It is a decentralized market in which market participants trade stocks,

commodities, currencies or other instruments directly between two parties
and without a central exchange or broker and happens electronically.

Spot It is where financial instruments, such as commodities, currencies and

securities, are traded.

Futures It is a market where contracts are originated and traded that give the holder
the right to buy something in the future at a price specified by the contract.

Options It is where stock options are traded.

Foreign It is a market where people buy and sell foreign currencies.

Answers to Checking for Understanding:

5. C
4. A
3. C
2. A
1. B

This document is the property of PHINMA EDUCATION

 FIN010: Capital Markets
Student Activity Sheet Module #4

Name: _________________________________________________________________ Class number: _______

Section: ____________ Schedule: _______________________________________ Date: ________________

This document is the property of PHINMA EDUCATION