Financial Management: Core Concepts, Third Edition

1.3 Financial Markets

Financial markets are the forums in which buyers and sellers of financial assets (such as stocks and bonds) and commodities (such as grains, oil, and gold) meet. Again, financial markets are the locations, both physical and virtual, where transactions take place. The NYSE has a physical trading floor at 11 Wall Street in New York City where buying and selling take place. Other markets are virtual spaces where transactions occur over a network of computers, such as the National Association of Securities Dealers Automated Quotations (NASDAQ).

We can classify financial markets in a number of ways. Let’s examine four: (1) by type of asset traded, (2) by the maturity of the assets, (3) by the owner of the assets, and (4) by the ...