Table of Contents
1 Cover
5 Preface
6 Preface to the First Edition
9 CHAPTER 1: An Introduction to Financial Institutions, Instruments, and Markets THE ROLE OF AN ECONOMIC SYSTEM A COMMAND ECONOMY A MARKET ECONOMY CLASSIFICATION OF ECONOMIC UNITS AN ECONOMY'S RELATIONSHIP WITH THE EXTERNAL WORLD THE BALANCE OF TRADE THE CURRENT ACCOUNT BALANCE FINANCIAL ASSETS MONEY MONEY AS A UNIT OF ACCOUNT OR A STANDARD OF VALUE MONEY AS A MEDIUM OF EXCHANGE MONEY AS A STORE OF VALUE MONEY IS PERFECTLY LIQUID EQUITY SHARES DEBT SECURITIES PREFERRED SHARES FOREIGN EXCHANGE DERIVATIVES FORWARD AND FUTURES CONTRACTS OPTIONS CONTRACTS SWAPS MORTGAGES AND MORTGAGE-BACKED SECURITIES HYBRID SECURITIES PRIMARY MARKETS AND SECONDARY MARKETS EXCHANGES AND OVER-THE-COUNTER (OTC) MARKETS BROKERS AND DEALERS THE NEED FOR BROKERS AND DEALERS TRADING POSITIONS THE BUY-SIDE AND THE SELL-SIDE INVESTMENT BANKERS DIRECT AND INDIRECT MARKETS MUTUAL FUNDS MONEY AND CAPITAL MARKETS THE EUROCURRENCY MARKET THE INTERNATIONAL BOND MARKET GLOBALIZATION OF EQUITY MARKETS DUAL LISTING FUNGIBILITY ARBITRAGE ARBITRAGE WITH ADRs GDRs RISK AFTER THE TRADE – CLEARING AND SETTLEMENT DEMATERIALIZATION AND THE ROLE OF A DEPOSITORY CUSTODIAL SERVICES GLOBALIZATION – THE NEW MANTRA NOTES
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CHAPTER 2: Mathematics of Finance
INTEREST RATES
THE REAL RATE OF INTEREST
THE FISHER EQUATION
SIMPLE INTEREST & COMPOUND INTEREST
PROPERTIES
A SYMBOLIC DERIVATION
PRINCIPLE OF EQUIVALENCY
CONTINUOUS COMPOUNDING
FUTURE VALUE
PRESENT VALUE
HANDLING A SERIES OF CASH FLOWS
THE INTERNAL RATE OF RETURN
EVALUATING AN INVESTMENT
ANNUITIES: AN INTRODUCTION
ANNUITY DUE
PERPETUITIES
THE AMORTIZATION METHOD
AMORTIZATION WITH A BALLOON PAYMENT
THE EQUAL PRINCIPAL REPAYMENT APPROACH
TYPES