1. FNCE 4070 29 August 2012

2. Function of Financial Markets

5. Indirect Finance Example Vanguard Short-Term Treasury Fund (VFISX) – Profile - The investment seeks current income. The fund invests at least 80% of assets in U.S. Treasury bills, notes, bonds, and other guaranteed U.S. government obligations. It maintains an average weighted portfolio maturity of between one to four years. – Net Assets $6.67B – Minimum Investment $3,000.00

6. Structure of Financial Markets Primary Market – New security issues sold to initial buyers – Typically involves an investment bank who underwrites the offering Secondary Market – Securities previously issued are bought and sold – Examples include the NYSE and Nasdaq – Involves both brokers and dealers