guide to financial 
               markets
               Why they exist and how they work
               Seventh edition
               marc levinson 
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Untitled-2   1                                                                   29/11/2017   16:30
              Published under exclusive licence from The Economist by 
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              Copyright © The Economist Newspaper Ltd, 1999, 2000, 2002, 2006, 2010, 2014, 2018
              Text copyright © Marc Levinson, 2018
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              The greatest care has been taken in compiling this book. However, no responsibility 
              can be accepted by the publishers or compilers for the accuracy of the information 
              presented. 
              Where opinion is expressed it is that of the author and does not necessarily coincide 
              with the editorial views of The Economist Newspaper.
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              cited in this book, in the case of those it has not been possible to contact successfully, 
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              A CIP catalogue record for this book is available from the British Library 
              isbn 978 1 78816 034 6
              eisbn 978 1 78283 438 0
                 
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                                Contents
                                      List of tables vii
                                      List of figures                                                                                        viii
                                 
                                1     Why markets matter                                                                                        1
                                2   Foreign-exchange markets                                                                                  17
                                3     Money markets                                                                                           44
                                4   Bond markets                                                                                              69
                                5     Securitisation                                                                                        111
                                6   International fixed-income markets                                                                      137
                                7     Equity markets                                                                                        154
                                8     Futures and options markets                                                                           197
                                9   Derivatives markets                                                                                     254
                                 
                                      Index 275
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                     Tables
                     1.1   The world’s financial markets                                      5
                     1.2   Financial assets of institutional investors, 2016                10
                     2.1   Global foreign-exchange market turnover                          24
                     2.2   Largest exchanges for currency futures contracts                 25
                     2.3   Global foreign-exchange trading, by currency                     27
                     2.4   Development of the London market                                 28
                     2.5   Typical newspaper currency prices                                41
                     2.6   Currency cross-rates                                             42
                     3.1   Corporate commercial paper outstanding in the  
                           United States                                                    53
                     3.2   Short-term credit ratings                                        63
                     4.1   Outstanding amounts of domestic debt securities                  70
                     4.2   Long-term bond issuance                                          76
                     4.3   What bond ratings mean                                           90
                     4.4   Returns on government bonds, 2017                                94
                     5.1   Issuance of non-mortgage asset-backed securities                112
                     5.2   Global issuance of structured-finance CDOs                      117
                     5.3   US agency mortgage-backed securities                            121
                     5.4   Residential mortgage securities issued in Europe                123
                     5.5   Asset-backed securities outstanding in the United States, 
                           excluding mortgages                                             127
                     5.6   Asset-backed securities outstanding in Europe, excluding 
                           mortgages 127
                     6.1   Amounts of outstanding international bonds and notes, by 
                           currency                                                        142
                     6.2   Net issuance of international money-market instruments          143
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