Financial Markets: Types and Functions
Financial Markets
Any marketplace where the trading of securities occurs. They are made by buying and selling numerous types of financial instruments including equities, bonds, currencies, and derivatives.
What happens when financial markets fail? Economic disruption, recession, and unemployment.
Objective: To channel the savings of families and companies to investment and create security products that provide a return for those who have access to funds and make funds available for those who need
Read MoreUnderstanding Utility, Demand, and Supply in Economics
Understanding Utility, Demand, and Supply
Utility
Utility is the capacity of a commodity or service to satisfy a need.
A good or service is considered useful for someone if that person needs to possess or not possess it.
Types of Income/Utility
- Total Utility (UTX): Represents the sum of satisfaction obtained by a consumer from using a certain amount of goods.
- Average Net Income (UPX): Represents an arithmetic distribution resulting from dividing the total income by the number of satisfiers consumed.
The
Understanding Financial Instruments: Indexes, Equity & More
Understanding Key Financial Concepts
An index is a group of securities chosen to track a particular investment theme such as a market, asset class, sector, industry, or even strategy. Generally, the goal is to accurately represent the risk/return profile of that theme without necessarily holding every security that might qualify. Indexes can be used in a variety of ways:
- To assess a given market’s performance
- To gauge how well an active strategy is working
- To serve as the foundation for investment
Business Structures: SA, SL, Cooperatives, and Individual Businesses
Understanding Different Business Structures
Sociedad Anónima (SA) – Corporation
- The minimum number of members to constitute an SA is one (sole shareholder).
- The minimum capital for setting up an SA is approximately €60,101.21. This capital is divided into equal parts called shares, which give shareholders rights such as voting at general meetings, receiving periodic information on the company’s situation and accounts, and receiving dividends.
- Shares can be traded on the stock exchange.
- The responsibility
Global Political Economy: Key Periods and Development Models
Rise and Fall of Liberalism
- International trade
- The gold standard
- Technological and industrial advances
- Emergence of USA after British hegemony
Setbacks to Liberalism
- The effect of WWI and WWII
- The Big Crash (1929): 1st crisis
Growth and Expansion
- Keynesianism and expansion of EU, USA, and Japan
- Bretton Woods international monetary system: Fixed exchange rates with dollar-gold standard
- Trade expansion (GATT)
Crisis and Neo-Liberalism
- Oil crisis (2nd)
- External Debt crisis
- Neo-liberalism: solution to ‘Stagflation’
China’s Business Environment and Market Entry
1. Business Competitive Environment
Ease of Doing Business: China’s rank in global “Ease of Doing Business” indexes has improved over the years, particularly in areas like starting a business, dealing with construction permits, and enforcing contracts. However, challenges remain in areas like obtaining credit and protecting minority investors.
General Freedom: While China offers significant business opportunities, the regulatory environment can be complex and subject to political control. The government