The first financing, such as listing the company and issuing stocks and bonds, can solve the financial difficulties for companies with development potential and make the company fully capitalized.
The second is hedging risk. Industrial companies hedge the losses caused by the decline or rise of commodity prices through futures market hedging.
Third, balance the distribution of funds in various industries. Some industries have extra funds in a certain period of time and lend to industries that lack funds through banks.
Three themes of monetary and financial research: money, banks and financial markets.
Macroeconomics-Monetary Economics-Monetary Finance
Microeconomics-Financial Economics-Asset Pricing/Corporate Finance
On the evening news, you just learned that the Federal Reserve raised the federal funds rate by 0.5 percentage point. If you are going to take out a loan to buy a beautiful new sports car, do you know what effect this will have on the interest rate of car loan? Does this mean that your ability to bear housing costs will become stronger or weaker in the future? Will it be easier or harder for you to find a job next year?
1. Why study financial markets?
1. What is a financial market?
Securities market, bond market, bank lending market, etc.
2. Why do you want to study financial markets?
Improve the efficiency of economic operation;
Affect the wealth and behavior of individuals/enterprises.
3. Bond market and interest rate
The bond market can help enterprises and governments raise operating funds and determine interest rates, which is of great significance to economic operation.
practical application
If you are the CFO of a large company, which of the following financial markets will your company use: bond market, stock market or foreign exchange market? Explain the specific reasons.
1. Your company has 1 billion dollars, and plans to use this money to build a factory in Germany.
2. Your company plans to borrow US$ 6,543.80 billion to build a factory in the United States.
3. Your company hopes to raise 1 100 million dollars to build a factory by selling part of the ownership, that is to say, your company hopes to attract new partners.