Category Archives: Financial market

Economic Functions of Financial Markets

The two primary economic functions of financial assets were already dis- cussed. Financial markets provide three additional economic functions. First, the interactions of buyers and sellers in a financial market determine the price of the traded asset; or, equivalently, the … Continue reading

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Classification of Financial Markets

There are five ways that one can classify financial markets: (1) nature of the claim, (2) maturity of the claims, (3) new versus seasoned claims, (4) cash versus derivative instruments, and (5) organizational structure of the market. The claims traded … Continue reading

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PRINCIPLES FOR ENGINEERING A SUITE OF MODELS

Creating a suite of models to satisfy the needs of a financial firm is engineering in full earnest. It begins with a clear statement of the objectives. In the case of financial modeling, the objective is identified by the type … Continue reading

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