Financial Markets vary in all developed state eco

Financial Markets vary in all 
developed state economies. These variations are consistent with markets dealing 
in different items, target audiences or target locations. Confirmed by Ehrhard 
& Brigham, there are seven noted financial markets that will be discussed. 
Stated by a recently reviewed research paper regarding this topic, Financial 
Markets are a significant means by which savings, public or private, are 
transformed into productive investments ( Gaa, Ogrodnick, Thurlow, Lumpkin 2001 
)
 
A physical asset market is also 
known as an “existent and perceptible” market. A realistic market is a correct 
formulation about this market.  This type of market handles stocks, bonds, 
notes, mortgages, derivatives, and other types of financial instruments 
(Ehrhard, Brigham 2011). To better elaborate, the physical assets are referred 
to cash, equipment, inventory and properties owned by the business itself.
 
Spot “Future” Market is when asset 
transactions are purchased and sold within days or a set date in the present 
future. This type of market is considered to be “on-the-spot” delivery (Ehrhard, 
Brigham 2011) Transactions could happen within four to six months at most a 
year, which is considered acceptable for this transaction to occur within this 
type of market. Spot Market in which commodities; wheat, silver, gas are dealt 
in for cash and immediate delivery.
 
A Money Market are a shorten period 
of time type of market considered for highly liquid debt securities (Ehrhard, 
Brigham 2011). The short term market is less than twelve months. Intermediate 
term is between twelve- to sixty months. Long term means greater than sixty 
months.
 
Capital Markets is a market 
especially for corporate stocks and debt growth up to maturation greater than a 
year. Stated by Ehrhard and Brigham, the New York Stock Exchange is an example 
of a capital market (Ehrhard, Brigham 2011).  Modern day type of capital market 
is conducted by computer based electronic trading systems only accessible by 
entities and individuals within the financial sector the treasury department of 
the government. Examples of funds that are long term are pension funds, hedge 
funds, and sovereign wealth funds.
 
Mortgage Markets deals with loans 
on residential, agricultural, commercial and industrial real estate. (Ehrhard, 
Brigham 2011) Markets of borrowers and mortgage originators to negotiate terms 
and effectuate mortgage transactions. The main players involved are mortgage 
bankers, credit unions and banks. These are started as primary mortgages and 
then sold into secondary mortgages most commonly. Based on Forte, the paper 
discusses three elements which are essential for any structure to be marketable; 
(1) the structure must not permit any interruption of the cash flow from the 
property to the ultimate investor; (2) all information regarding the borrower, 
principals of the borrower, the property, and the mortgage must be disclosed to 
the investors; and (3) the structure must disallow or must compensate for the 
repayment of any principal before its scheduled repayment, whether in 
installments or at maturity (Forte 1996). To elaborate the goal is to improve 
lender and borrower knowledge of the cost of a variation. Reinforcing these 
ideal Forte states that the lender understands of pricing and capital market 
value of loan asset will create and improve the borrower- understanding of rate 
offered by the lender (Forte 1996). The understanding barrier between 
distinguished parties will be further discussed in the world market discussion 
later in this paper. Overall this market pays key to the ideal of borrower and 
lenders having a comprehensive understanding of key factors regarding mortgage 
in the mortgage market.
 
Consumer Credits Markets involves 
loans for vehicles, kitchen and bathroom appliances, education, vacations, and 
other useful accessories (Ehrhard, Brigham 2011). To better explain, A debt that 
an individual acquires for the purpose of buying a product or service. This is 
also referred to as a consumer debt.
 
World, National, Regional, and 
Local Markets relates to size and scope of market operations. Borrowing and 
lending can be worldwide or confined to strictly local market. (Ehrhard, Brigham 
2011) To better explain this is not the store World Market where I could spend 
all day in however it is considered a market where the geographical boundaries 
are considered to be the market. Regarding a world market there are factors that 
deter investors based on the information barriers. Difference in language, 
accounting standards and incomplete knowledge regarding foreign investment 
opportunities all seem to dissuade investors  from investments in foreign 
countries ( Gaa, Ogrodnick, Thurlow, Lumpkin 2001 ).
 
Primary Markets are markets which 
newly issued securities are sold, via transactions of the market, for the first 
time. Primary market has subsets of markets such as Initial Public Offering 
(IPO) Market, Secondary Markets. IPO Markets is when the corporation goes 
public. Going public is the act of selling stock to the public at large by a 
closely held corporation of its principle stockholder chairman (Ehrhard, Brigham 
2011).  Secondary Markets is known for reselling securities from the previous 
IPO market which both are subsets of the primary market. Secondary market is 
considered when markets are resold after an initial issuing in the primary 
market. (Ehrhard, Brigham 2011). To better explain a market that issues new 
securities on a give-and-take principle. This provides governments and company 
to obtain financing through debt or equity based securities. Primary markets 
allow investors to claim the first opportunity at securities suggested above.
 
Private Markets are a type of 
market which transactions are conducted directly between two parties and 
organized in any manner best appealing or discussed between the two parties. 
Bank Loans and Private Placements of debt with insurance companies are a prime 
example of private market transactions and not allocated for any public 
competition for bidding or purchasing (Ehrhard, Brigham 2011) To better explain 
private markets, it is by invitation only and not permitted by the public. There 
are select parties that may be interested in purchasing or selling the selected 
securities.
 
Public Markets is a market in which 
standardized contracts are traded on organized exchanges. Securities that are 
issued in public market, such as common stock and cooperate bonds are ultimately 
held by a large number of individuals (Ehrhard, Brigham 2011). This type of 
market is a complete opposite from private market. These markets are offered to 
the general public and all investors interested for the securities involved.
 
 
 
References

1.	Ehrhardt, M. & Brigham, E., Corporate Finance - 1.8 Financial Markets. 
(2011). 
 
                
(4th ed., pp. 27-29). Mason, OH: South-Western. Retrieved May 13, 2013 , from 
                                             
 
                 Cengage Learning's eText 
Collection. via Cengage Learning's eText Collection

1.	Forte, J. P. (1996). A capital markets mortgage: A ratable model for main 
street and wall street.
 
                
Real Property, Probate and Trust Journal, 31(3), 489-522. Retrieved from 
https://www.proquest.com

1.	Gaa, C., Ogrodnick, R., Thurlow, P., & Lumpkin, S. A. (2001). Future 
prospects for national
 
financial markets and trading centres. Financial 
Market Trends, (78), 37-72. Retrieved from https://www.proquest.com