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u The Flow of Savings to Corporations


u Functions of Financial Markets
u Functions of Financial Intermediaries

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Money

6rimary OTC
Markets Markets
Secondary
Markets
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u Financing Decision
u Source of Funds ³Capital´
u Capital Structure
u Money Markets
u Euros

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() (1)
Firm's Investors
Financial
operations (4)
Manager (  



  
    
 )
(timberland)
(3) (4)

(1) Investors buy shares with cash


(2)Cash is invested
(3) Timber harvest generates cash
(4a) Cash reinvested
(4b) Cash returned to investors

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Issue Debt

Company Investors
Cash

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$ $
ank of Windsor Investors
America Fund
Sells Issues
shares shares

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Company

anks Obligations Funds

Insurance Cos. Intermediary


rokerage Firms
Obligations Funds
Depositors
Investor
6olicyholders
Investors

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Company

Loan $2.5 mil

anks Intermediary

Deposits Cash

Investor
Depositors

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Company

Loan $250 mil


Insurance
Company Intermediary

Sell policies Cash


Issue Stock

Investor
6olicyholders

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[ Holdings of Corporate and Foreign onds (Qtr 1, 2002)

"4 11! H   
10#
  
1! %

&
 
 
11$
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#$

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[ Holdings of Corporate Equities (Qtr 1, 2002)

14 H   
1!$
  
3$$
%

&
 
 
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0$   

$3 1$ 11) ( 

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Information 6rovided by Financial Markets


u Commodity prices
u Interest rates
u Company values

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