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Chapter Three - Financial Environment
- Financial Markets - Audio
- Financial Instititutions
- Stock Markets - Audio
- New York Stock Exchange
- American Stock Exchange
- NASDAQ
- Determination of Interest Rates - Audio
- The observed rate consists of the real rate of return plus inflation (price-expectations).
- Interest rates reflect the cost of money
- Interest Rates are influenced by three factors:
- The quantity of money - determined by the Federal Reserve.
- The Income Effect
- Price-Expectations Effect
- Term Structure of Interest Rates - Current Yield Curve
- Unbiased Expectations Theory
- Liquidity Premium Theory
- Market Segmentation Theory
- The term structure over the business cycle
- Interest Rate Levels and Stock Prices
- Earnings
- Discount Rate
- Flow Diagram of Stock Price Determination
- Tax System
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