part Chapter 2009 The McGraw-Hill Companies, Inc. All rights
reserved. 1 McGraw-Hill Money, Financial Institutions, and
Securities Markets 1 Chapter 13 2009 The McGraw-Hill Companies,
Inc. All rights reserved. 2 McGraw-Hill 1.Understand the importance
of money and its basic characteristics. 2.Describe how the Federal
Reserve controls the money supply. 3.Explain the functions of the
Federal Reserve. 4.Understand how securities markets work.
5.Explain the differences among stocks, bonds, and mutual funds.
Learning Objectives 2009 The McGraw-Hill Companies, Inc. All rights
reserved. 3 McGraw-Hill Barter Coins Portable Divisible Stable
Durable Unique Simplify exchanges e-cash The Importance of Money
2009 The McGraw-Hill Companies, Inc. All rights reserved. 4
McGraw-Hill Government control Money classification: M1 M2 M3
Inflation Deflation Recession Money Supply 2009 The McGraw-Hill
Companies, Inc. All rights reserved. 5 McGraw-Hill Board of
Governors Monetary policies Federal Open Market Committee (FOMC)
Reserve requirement One of the Feds most powerful tools Open-market
operations Circulation The discount rate Bankers bank Basics about
the Federal Reserve 2009 The McGraw-Hill Companies, Inc. All rights
reserved. 6 McGraw-Hill Falling dollar Rising dollar Demand for
dollars Global Exchange of Money 2009 The McGraw-Hill Companies,
Inc. All rights reserved. 7 McGraw-Hill The Function of Securities
Markets New York Stock Exchange (NYSE) NASDAQ Primary market IPO
Secondary market Going public Debt and Equity financing Investment
bankers Securities and Exchange Commission (SEC) 2009 The
McGraw-Hill Companies, Inc. All rights reserved. 8 McGraw-Hill
Bonds Definition Maturity date Advantages Disadvantages Government
can issue bonds as well 2009 The McGraw-Hill Companies, Inc. All
rights reserved. 9 McGraw-Hill Preferred stock No voting rights
Callable Convertible Common stock Holders can vote Share in profit
Preemptive right Financing Stock certificate Par value Dividends
Advantages and Disadvantages Stocks 2009 The McGraw-Hill Companies,
Inc. All rights reserved. 10 McGraw-Hill Mutual Funds Investors can
take part in ownership Best way to start Index fund Diversification
Stock Exchanges NYSE Over-the-counter market Securities exchanges
regulation Protects investors SEC Insider trading 2009 The
McGraw-Hill Companies, Inc. All rights reserved. 11 McGraw-Hill
Investing in Securities Not difficult Stockbroker Important to
follow stocks Considerations Investment risks Yield Duration
Liquidity Tax consequences 2009 The McGraw-Hill Companies, Inc. All
rights reserved. 12 McGraw-Hill Reading Stock Quotes 2009 The
McGraw-Hill Companies, Inc. All rights reserved. 13 McGraw-Hill
Reading Mutual Fund Quotes 2009 The McGraw-Hill Companies, Inc. All
rights reserved. 14 McGraw-Hill Reading Bond Quotes
