1. 1 Financial Management Didi Sundiman sundiman.didi@gmail.com didi.unda.ac.id Hp. 081250832204

2. 2 Chapter 2: Financial Markets and Institutions

3. 3 OBJECTIVES Identify types of financial markets & institutions and Different types of stock markets. Explain how the stock market has performed in recent years. why some markets are more efficient than others.

4. 4 THE CAPITAL ALLOCATION PROCESS

5. 5 CLASSIFY MARKETS Physical asset markets versus financial asset markets Spot markets versus futures markets. Money markets versus capital markets. Primary markets versus secondary markets. Private markets versus public markets.

6. 6 FINANCIAL INSTITUTIONS Investment banks Commercial banks Others …p.59

7. 7 THE STOCK MARKET the most active secondary market—and the most important Physical location exchanges, NYSE, the American Stock Exchange (AMEX) electronic dealer-based markets, which include the Nasdaq

8. 8 THE MARKET FOR COMMON STOCK Outstanding shares of established : the secondary market. Additional shares sold Initial public offerings

9. 9 STOCK MARKETS AND RETURNS expected and realized Stock Market Reporting: The Wall Street Journal Stock Market Returns, next

10. 10 STOCK MARKET EFFICIENCY Market price Intrinsic value Equilibrium price Efficient market

11. 11 STOCK MARKET EFFICIENCY

12. 12