Global Financial Markets CHAPTER 21 11/15/2018 CHAPTER 21 Global Financial Markets 21-1 Global Stock Markets 21-2 Bond Markets and Other Financial Markets 21-3 Global Investments INTERNATIONAL BUSINESS

LESSON 21-1 Global Stock Markets GOALS Describe how and where stocks are bought and sold. Explain factors that affect stock prices. Identify major sources of stock market information.

21 Major Stock Exchanges A stock exchange is a location where stocks are bought and sold. More than 130 stock exchanges around the world

The Stock Market in Action 21 The Stock Market in Action

Stock Market Price Information 21 Stock Market Price Information The main influence on stock prices is demand for ownership in a company based on its current and future profitability. In addition, economic conditions, the political situation, and social trends can influence stock prices. After an agreement on price is reached, this information becomes public. Each day millions of stocks are bought and sold. Information about current stock prices, dividends, volume, and past prices are reported online, on television, and in newspapers.

LESSON 21-2 Bond Markets and Other Financial Markets GOALS Explain how investors earn money from corporate bonds. Identify different types of government bonds. Describe the role of other global financial markets.

21 Corporate Bonds A bond is a certificate representing money borrowed by a company or another organization to be repaid over a long period of time. A corporate bond is a debt certificate issued by a multinational company or another corporate enterprise.

Two Types of Corporate Bonds 21 Two Types of Corporate Bonds A mortgage bond is debt secured by a specific asset or property. The collateral for a mortgage bond may be equipment, a building, or land. A corporate bond without collateral is a debenture bond. These are unsecured debt in which the bondholder is a general creditor of the company.

Government Bonds 21 Federal government bonds State and local government bonds Foreign government bonds

Other Financial Markets 21 Other Financial Markets The over-the-counter (OTC) market Foreign exchange market Futures market

LESSON 21-3 Global Investments GOALS Describe the two major goals of investors. Analyze international investment opportunities. Identify major sources of investment information.

Investment Goals 21 Current income Long-term growth Dividends from stocks Savings certificates Corporate bonds Rental property Long-term growth Growth stocks Raw land Gold, silver Coins, stamps Arts, antiques

Global Investment Opportunities 21 Global Investment Opportunities Identifying potential investments Evaluating investment opportunities Rate of return Liquidity Taxes Safety

Investment Information Sources 21 Investment Information Sources News media Internet Financial experts Investment information services