Scribd Logo
Upload

Welcome to Scribd!

  • Finmar Lascano 2021

    Uploaded by

    Evelyn Labhanan
    134 views250 pages
    finmar

    Original Title

    FINMAR LASCANO 2021

    Copyright

    © © All Rights Reserved

    Available Formats

    PDF or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    Report this Document
    finmar

    Copyright:

    © All Rights Reserved
    Download as PDF or read online from Scribd
    Flag for inappropriate content
    134 views250 pages

    Finmar Lascano 2021

    Uploaded by

    Evelyn Labhanan
    finmar

    Copyright:

    © All Rights Reserved
    Download as PDF or read online from Scribd
    Flag for inappropriate content
    of 250
    Financial Markets —- Fundamentals and Trends MARVIN V. LASCANO, CPA, CFC, DBA PTT, ML OLED A eet Oe eA ULELN MARVIN V. LASCANO CPA, CFC, DBA Marvin V. Lascano is a Certified Public Accountant and Certified Financial Consultant by profession. He eamed his degrees in Bachelor of Science in Accountancy, Master Administration major in Financial Management and later on Doctor in Business Administration in Polytechnic University of the Philippines. Dr. Lascano has extensive experience and exposure on financial modelling, corporate valuation, financial —_statement preparation and analysis, and business process reengineering. He also underwent Financial Modelling Masterclass from the Institute of Financial Consultants in the Philippines; and Euromoney Asia in Singapore. He is an alumnus and guest lecturer of the International Regulation Leadership program of the Public Utility Research Center of University of Florida. He also earned a certification as Certified Scrum Master in Las Vegas, USA. He is also a faculty member of the College of eas and Finance of the University of — the handling subjects on nansgernert, Management in Business University of the P since 2014 handling Accounting, Financial Financial Management has 10 years of Corporate Finance and Controls. His corporate experience _ includes financial due diligence for transactions, commercial — diligence, financial modeling, investment evaluations, analyses and commercial also engages with banks, companies, mutual fund and underwriters to. investment opportuniti graduated from Polytechnic of Philippines - Manila Le 2 degree in BS C Passed the the same year. He is of Master in Busi from the Philippines — Manila. Elements of the Financial Financial Markets.....e.ss... Chapter 2 FINANCIAL REGULATION Financial Regulatio: Regulators of Financial Acti Money Supply and Payment System Effective Risk Management.. so Chapter 3 MONEY MARKET AND FINANCIAL INSTRUMEN’ Money Market. Financial Instruments. Types of Money Market Financial Instrument: Evaluating Money Market Securities Chapter 4 DEBT MARKET Debt Securities Market .. The Bond Market.. ion of Interest Rate Credit Ratings ... Chapter 5 EQUITY SECURITIES MARI Chapter 1 FINANCIAL MARKET AND THE FINANCIAL SYSTEM The Financial System In the field of commerce, finance is a key player in ens continuity of operations. As they say, it is the life-biood of the comp Financial management is an important process to ensure that profit wealth is maximized. It is important to understand how money re around in a system to enable development of strategies and plan on to keep the profit in the short run and wealth growing in the longrun. Sources of Wealth Money or wealth can be generated in different ways. In econo there are different sources of wealth. Figure 1 illustrates the sources. wealth and the type of wealth that can be generated. Let's call this Origin of Wealth. Every person always starts with baby steps. Of course, we ca discount the fact that we are heavily dependent on our families, parent particular, who provide us with our needs. Normally, a person comp: education then he/she will either work or start a business. Labor through hard work will allow them to earn a salary or wage. As a persor continuously earns, he/she can save and eventually acquire properties. Land is a form of property which can be used in their business or be leased to somebody else. ae e Either way, it will generate wealth in the | 280 Used as-amiaaiaaaay form of rent. Moving on, as property and | fr the purchasing power labor continuously earn, people start of a locality venturing to other form of vehicles with higher risk with the intention of aiming for higher returns. Point of Information! The minimum wage is As people accumulate funds or save more sufficient enough to infusing capital either financial or industrial. Now, that person ca considered as an investor. As the venture realizes good returns, the will earn interest. In succeeding chapters, we will discuss how to m the interest earned in capital markets. Optimistically, busi mature and grow need more focus. The investors eventually te participation in the business/venture. Thus, from investors they bé the entrepreneur of their own which requires entrep managing the commercial affairs and ensuring that continuously grows and generates more profit. Profit will accumulated, and investment will be diversified as it gro new breed of individuals and labor force and the cycle g see how finance plays in the system called business. FINANCIAL MARKETS: Fundamentals and Trends The word finance is well known and defined in different ways. Finance is the application of economic principles to decision-making that involves the allocation of money under conditions of uncertainty. In the field of commerce, investors allocate their funds among financial assets to accomplish their objectives i.e. to maximize profit and wealth in the long run. Businesses and governments, on the other hand, raise funds by issuing claims against themselves that are invested. Finance provides the framework for making decisions as to how those funds should be obtained and then invested. It is the financial system that provides the platform by which funds are transferred from those entities that have funds to invest to those entities that need funds to invest. Entrepreneurship Capital Tes SET Figure 1.1 Sources of Wealth The theoretical foundations for finance draw from the field of economics and, for this reason, finance is often referred to as financial economics. The tools used in financial decision-making, however, draw from many areas outside of economics: mathematics, statistics, psychology, and accountancy. Since accountancy deals in providing quantitative information, primarily financial in nature, it is a necessity for these disciplines to have an integration. Accountancy requires in-depth analysis of financial results and underlying transactions to provide reasonable recommendations. which among the courses of action should be considered. Financial system allows households, companies and the government who have available funds to invest these funds in more potentially productive vehicles that can result in faster growth in the economy. The financial system encourages fund savings from its ot FINANCIAL MARKETS: Fundamentals angry stakeholders anc transforms these savings efficiently into i vehicles that help the economy grow faster. To cite another good definition of financial system: “Financial system is a set of arrangements or conventions embracing the lending and borrowing of funds by non — financial economic units and the intermediation of this function by financial intermediaries in order to facilitate the transfer of funds, to create additional money when required, and to create markets in debt and equity instruments (and their derivatives) so that the price and allocation of funds are determined efficiently.” — Faure, AP. Financial system is composed of network of inter-related syste of financial markets, intermediaries and services. The financial system of a country carries out the essential economic function that transfers from parties that have available funds to parties that need funds. In a country, there households, companies and gover agencies who have available (cE etait because they spend less than y income. Essentially, these are the means ‘to end and settle | providers. On the other hand, there a debt also households, companies a government agencies that experie fund shortage because they decide to spend more than their inco These are fund demanders. Matching the difference in spending (ex funds from one party to the fund gap of another party) is the main for the existence of a financial system. Point of Information! The financial system permits an efficient mi between entities who have funds and entities who nea ee a systems serve as a regular, time-efficient and cost-effective link b fund providers and fund demanders. Within the financial system, fund efficiently transferred from one party to another throtgt it schemes on savings and investments that investors are will top in. Figure 1.2 illustrate the financial system, the players i thes more importantly how the funds flow in the system oo ae utes: via direct financing | Funds can flow in two rot Direct financing, In thi nae. bceal vay wiht uppleter ee eee FINANCIAL MARKETS: Fundamentals and Trends a recognize financial instruments as liabilities while lenders recognize these as an asset. Buying stocks directly from a company is also considered as direct financing. + Indirect financing. In this route, the borrowing activity between both parties still happens though indirectly through the intervention ofa | intermedia A | Money FINANCIAL DEMANDERS INTERMEDIARIES (Borrowers)

    You might also like