Transcript ch01_final.ppt

Copyright © 2004 Pearson Education Canada Inc.
Slide 1–1
Chapter One
Why Study Financial Markets
and Institutions?
Why Study Financial Markets?
1. Channels funds from savers to investors,
thereby promoting economic efficiency
2. Affects personal wealth and behaviour
of business firms
Copyright © 2004 Pearson Education Canada Inc.
Slide 1–3
Bond Market and Interest Rates
Copyright © 2004 Pearson Education Canada Inc.
Complete list of interest rates
http://www.bankofcanada.ca
Slide 1–4
Stock Market
Copyright © 2004 Pearson Education Canada Inc.
Slide 1–5
Foreign Exchange Market
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Slide 1–6
Why Study Financial Institutions?
1. Central Banks and the Conduct of Monetary Policy
2. Structure of the Financial System
– Helps get funds from savers to investors
3. Banks and Other Financial Institutions
4. Financial Innovation
5. Managing Risk
Copyright © 2004 Pearson Education Canada Inc.
Slide 1–7
How We Study Financial Markets
and Institutions
• Basic Analytic Framework
1. Simplified approach to the demand for assets
2. Concept of equilibrium
3. Basic supply and demand approach to understand behaviour in
financial markets
4. Search for profits
5. Transactions cost and asymmetric information approach
to financial structure
6. Aggregate supply and demand analysis
Copyright © 2004 Pearson Education Canada Inc.
Slide 1–8
How We Study Financial Markets
and Institutions
• Features
1.
2.
3.
4.
5.
6.
Case studies
Applications and Numerical Examples
Special Interest Boxes
Following the Financial News boxes
Reading the Financial Pages
Practising Financial Institution Manager applications
Copyright © 2004 Pearson Education Canada Inc.
Slide 1–9
Exploring the Web
• Web Exercise:
Historical Relationship Between ShortTerm Interest Rates
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Slide 1–10
Exploring the Web
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Slide 1–11
Exploring the Web
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