Finman Report Chapter 8
Finman Report Chapter 8
Spot markets- are markets in which asset are bought or sold for “on the
spot” delivery.
Future markets- are markets in which participants agree today to buy or
sell at some future date.
TYPES OF MARKET
7. Mutual funds- organization that pool investor funds to purchase financial instrument
and thus reduce risks through diversification.
8. Exchange trade funds- similar to regular mutual funds and are often operated by
mutual fund companies.
9. Hedge funds- similar to mutual fund because they accept money and use the funds to buy
various securities but there are some important differences.
10. Private equity exchange-organization that operates much like hedge funds but rather
than purchasing some of the stock of firm, private equity players buy and then manage
entire firms.
STOCK MARKETS
It is the security that are outstanding and owned by the investors are usually bought and
sold through the secondary market.
KINDS OF STOCK MARKET
1) The organized stock exchange- the stock exchanges will have a physical location
where stocks buying and selling transaction takes place in the stock exchange floor.
2) The over-the-counter exchange- where share , bonds and money market instrument
are traded using a system of computer screen and telephones.
REASON FOR TRANSACTION IN STOCK MARKET