A core text for one semester courses in Financial Institutions and Markets. A comprehensive exploration of the world's financial markets and institutions. Foundations of Financial Markets and Institutions, offers a comprehensive exploration of the revolutionary developments occurring in the world's financial markets and institutions -i.e., innovation, globalization, and deregulation-with a focus on the actual practices of financial institutions, investors, and financial instruments. This fourth edition incorporates and addresses the vast amount of changes that have recently occurred in financial institutions and markets around the world.Preface 1 Introduction 2 Financial Institutions, Financial Intermediaries, and Asset Management Firms 3 Depository Institutions: Activities and Characteristics 4 The U.S. Federal Reserve and the Creation of Money 5 Monetary Policy in the United States 6 Insurance Companies 7 Investment Companies and Exchange-Traded Funds 8 Pension Funds 9 Properties and Pricing of Financial Assets 10 The Level and Structure of Interest Rates 11 The Term Structure of Interest Rates 12 Risk/Return and Asset Pricing Models 13 Primary Markets and the Underwriting of Securities 14 Secondary Markets 15 Treasury and Agency Securities Markets 16 Municipal Securities Markets 17 Markets for Common Stock: The Basic Characteristics 18 Markets for Common Stock: Structure and Organization 19 Markets for Corporate Senior Instruments: I 20 Markets for Corporate Senior Instruments: II 21 The Markets for Bank Obligations 22 The Residential Mortgage Market 23 Residential Mortgage-Backed Securities Market 24 Market for Commercial Mortgage Loans and Commercial Mortgage-Backed Securities 25 Market for Asset-Backed Securities 26 Financial Futures Markets 27 Options Markets 28 Pricing of Futures and Options Contracts 29 OTC Interest Rate Derivatives: Forward Rate Agreements, Swaps, Caps, and Floors 30 Market for Credit Risk Transfer Vehicles: Credit Derivatives and Collateralized Debt Obligations 31 The Market for Foreign Exchange and Risk Control Instruments Index