Assignment for 7 July 2005: How Financial Markets Work

I. Read Introduction to Capital Markets

Assignment Questions:


1. Identify the major players, products, places, and processes that comprise the world’s financial markets? What are the principal characteristics of these elements of the financial markets?

2. Who are the major investors in various financial markets? How might their different situations, views, and requirements drive the product characteristics and opportunities for issuers?

3. Who are the major issuers in various financial markets? How might their different situations, views, and requirements drive the product characteristics and opportunities for investors?

4. What roles do bank intermediaries play in the financial markets? What are the risks and the rewards to banks?


II. Read International Plastics Company (A) case

Assignment Questions:

1. Why does International Plastics Company need financing? How should this need influence its financing choice(s) and strategies?

2. What are the major products, markets, and strategies that the company might consider for its financing? What are the principal characteristics of these products, markets, and strategies?

3. What are the advantages and disadvantages of various types of capital instruments that the company might chose? What would you recommend? Why?

4. What role would a bank intermediary play in helping the company with various types of financing strategies? What are the risks and the rewards to the bank?