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Financial Markets Financial Market

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Financial Markets Financial Market Powered By Docstoc
					       Balance Sheet

                      Liabilities +
    Assets
                        Capital
Cash                   Accounts payable

Accounts receivable    Accrued Salaries

                       Accrued Taxes
Inventory

                       Short-term loans
Investments
                       Long-term debt

Plant, equipment


                       Common Stock
Property

                       Retained earnings
Other assets
Current Assets and Current Liabilities

                               Liabilities +
             Assets
                                 Capital
         Cash                   Accounts payable

         Accounts receivable    Accrued Salaries

                                Accrued Taxes
         Inventory

                                Short-term loans
         Investments
                                Long-term debt

         Plant, equipment


                                Common Stock
         Property

                                Retained earnings
         Other assets
              Managing Current Assets


     Managing Cash                 Investing Idle Cash
  • Transaction Balances     • Marketable Securities
  • Lockbox                  • Treasury Bills (T-bills)
  • EFT-Systems              • Commercial CDs
                             • Commercial Paper


     Maximising Accounts        Optimising Inventory
         Receivable
                             • Economic Order Quantity
• Discounts                  Model (EOQ-Model)
• Late Payment Charge        • Just-in-Time Inventory
                             Management (JIT)
                             • Material-requirements
                             Planning (MRP)
                 Managing Current Liabilities


                        Current Liabilities



Accounts Payable            Bank Loans         Nonbank Liabilities


  Trade Credit               Line of Credit      Factoring

                             Secured Loans

                             Unsecured Loans
                      Managing Fixed Assets


                            Fixed Assets



Capital Budgeting           Assessing Risk   Pricing Long-Term
                                                   Money

  Project Selection
         Long-Term Financing


           Long-Term Financing


Debts                               Equity

Long-Term Liabilities       Common Stock


Long-Term Loans             Preferred Stock


Bonds                      Retained Earning
Financing with Long-Term Liabilities
                Unsecured Bonds
                  (Debentures)




 Junk Bonds       Bonds           Secured Bonds
                                  (with Collateral)
                     =
                   IOUs
Floating-rate
                                  Serial Bonds
   Bonds
                 Investment Banking

                  Investment Banking


 Primary                               Secondary
 Market                                 Market




                                                       Securities
New Issue                              Stock




                                                        Markets
of Stocks                              Exchanges
and Bonds
                                       Over-the-
Going Public                           Counter
                                       Markets (OTC)
Initial Public
Offering (IPO)
              Financial Markets
                Financial Market

 at once          Time of performance                                 In the future



Spot Market                                             Forward Market

                                              unconditional                           conditional
                  Type of performance


                                         Future                                Option
                      Underlying

                             Commodity               Financial
                              Raw Materials          Index, Foreign
                                                       Exchange,
                                                      Interest Rate

                        Choice
                                                                             Call              Put
                                                                              Buy               Sell
                                      Option Price Model
Option price




                         Option price curve
                                                       Time value

                                                                         Option price

                                                       Intrinsic value



                                                                                        Underlying price

               out-of-the-money       Strike       in-the-money
                                  (at-the-money)

				
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posted:10/3/2012
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