Reading 44 Market Organization and Structure (Layout)
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This reading is organized as follows:
Section 2 examines the functions of the financial system.
Section 3 introduces assets that investors, information-motivated traders, and risk managers use to advance their financial objectives and presents ways practitioners classify these assets into markets. These assets include such financial instruments as securities, currencies, and some contracts; certain commodities; and real assets. Financial analysts must know the distinctive characteristics of these trading assets.
Section 4 is an overview of financial intermediaries (entities that facilitate the functioning of the financial system).
Section 5 discusses the positions that can be obtained while trading assets. You will learn about the benefits and risks of long and short positions, how these positions can be financed, and how the financing affects their risks.
Section 6 discusses how market participants order trades and how markets process those orders. These processes must be understood to achieve trading objectives while controlling transaction costs.
Section 7 focuses on describing primary markets.
Section 8 describes the structures of secondary markets in securities.
Sections 9 and 10 close the reading with discussions of the characteristics of a well-functioning financial system and of how regulation helps make financial markets function better.