Capital Markets Quickly Explained

Must read book: Introduction to Actuaries and Actuarial Science

This video quickly explains capital markets by looking at what they are, what they are made up of, what they form part of, what they can do, what can be done to them, examples of them, their properties and what they are associated with.

I am experimenting with my new study method and this video was built on the framework, so please provide feedback.

This topic is part of the subjects CT2, CA1, ST5 and SA5.

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[MJtheFellowActuary]

Let's Keep in Contact

Hit the subscribe button if you would like to see more on Youtube.

Social Media:

Premium Content on Udemy:

Financial Maths & Theory of Interest

Financial Engineering & Portfolio Theory

Copulas

Credit Risk Models

Market Risk Models

Mathematical Statistics for Actuaries

Bayesian Statistics & Credibility Theory

Economic Capital Management & Models

Stochastic Processes & Markov Chains

Time Series

Loss Distributions

Principles of Actuarial Models

Excel for the CM2-B Exam (Financial Engineering)

How to become an Actuary (FREE)

[firefrostpeacemaker]

I would invest in the stock market. Specifically to well established corporations like Facebook and Google. The reasons are as follows:

Bond markets sell debt. In other words, I'm providing a loan of my money with the promise from the other party that I will be getting my principle back with interest. If interest rates were to decrease, then my profits from engaging in the bond market would decrease as well. This is also not taking into account the inflation rate, which showcases the real interest rate, which would lower my money's value over time anyway as well.

Second reason is because companies can now borrow a lot of money from banks, increasing expansion, and thus the value of the stocks themselves.

Thirdly, although I initially thought emerging companies would be better to invest in, well established corporations can borrow more money, and perhaps enough to acquire the emerging companies. This makes investing in emerging companies more risky, as oppose to well established corporations, which would most likely earn a profit from a decrease in the interest rate.

[anjy-joeolatunbosun]

I'll trade in the bond market because it'll mean the bonds are less risky, more attractive and also have a high price cause you know interest rates vary inversely with bond price.

[ShaziAhmad]

if interest rate will decrease i will raise my capital through bond market as it might be beneficial in several ways.such as-
1.we can get more profit as interest rate will b less for redemtion
2.if bonds will be more, shareholders will b less and we can have again more profit as we dont hane to distribute the profit to the shareholders.and our retained earning will ultimately increase.
3.if our retained earning will increase our performance will become more good.as shareholders are the owner of enterprise and less shareholders more retained earnings and vice versa..

[pearlleselwa]

i would raise capital through the stock market because bond prices are more sensitive to changes in interest rate than stocks are. a decrease in interest rate will reduce incentive for investors to invest through debt. as for stock prices, a reduction in interest rates would reduce the cost of borrowing thus increasing potential profits of a firm. this ultimately leads to an increase in stock prices.

[hawkeye]

You would rather raise capital through debt or long-term bonds because securing a lower interest rate means less cash paid in interest over the life of the loan. Right?

[haroldvids]

What are the similarities of Primary & Secondary Market? - ASAP, thanks.

[sherylangobung]

Sir can you please put subtitle so that i can understand what your saying. I need it in my class. 😓