1.4 Assignment: Financial Markets and Interest Rates

Getting Started

In this assignment, you will learn about how funds are raised in the financial markets and how interest rates affect those markets. These topics will help you, as a member of the business community, to understand the basics of acquiring and managing capital in the financial marketplace.

Upon successful completion of the course material, you will be able to:

• Describe key components of the U.S. financial market system and the financing of business.
• Understand how funds are raised in the capital markets.
• Be acquainted with rates of return.
• Explain the fundamentals of interest rate determination.

Resources

• Bible
• Textbook: Foundations of Financial Management
• Website: Connect

Instructions

1. Review the rubric to make sure you understand the criteria for earning your grade.
2. Review Chapter 1 of Foundations of Financial Management and respond to the following questions provided:
   1. Distinguish between the money and capital markets.
   2. What is an investment banker, and what major functions does that person perform?
   3. Identify and describe three distinct ways that savings are ultimately transferred to businesses in need of cash.
   4. Define the term “structure of interest rates.”
3. Your responses should be 50–100 words for each question. They should demonstrate your understanding of the concepts at hand. You do not need to use APA formatting for this assignment. However, your ability to communicate your points clearly and concisely, demonstrating professional-level writing skills, will impact your grade.
4. When you have completed your assignment, save a copy for yourself and submit a copy to your instructor by the end of the workshop.