Finding Your Way in the Financial Markets

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Finding Your Way in the Financial Markets

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The financial markets create tremendous opportunities that, for many of us, would otherwise be out of reach. A new home. Your child’s college education. Retirement. Without the ability to borrow and invest, life as we know it simply wouldn’t exist.

Taking full advantage of everything the markets have to offer requires not only becoming familiar with its unique instruments, practices, and risks, but understanding the ways the financial world and your own life are inextricably linked in ways both direct and indirect, visible and obscured.

But with record-breaking highs one minute and economy-rocking lows the next—not to mention arcane rules and ambiguous terminology—it can seem as if there’s no way to feel truly comfortable in this mysterious world. But there is, and it’s more accessible than you might think.

Financial Literacy: Finding Your Way in the Financial Markets is an essential primer on this domain, from its functions, strengths, and possibilities to its weaknesses and vulnerabilities. In 24 eye-opening, plainspoken lectures, award-winning Professor Connel Fullenkamp of Duke University reveals the interconnected workings of the financial markets and how society’s financial strength—and your own—depend on money continuing to move through these channels. You’ll not only gain a new appreciation for the variety of financial products and services available to you, but also for how crucial we as individuals are to the functioning of the entire system.

You’ll clearly see how these markets affect you—and vice versa—any time you’re involved in a financial transaction, whether you’re

financing a car;
applying for a mortgage;
receiving a preapproved credit card offer;
participating in your company’s 401K plan; or
making a deposit at your local bank.

Introductory in nature but by no means taught at a surface level, this course provides the concepts and tools you need to draw direct connections between headlines made globally and what’s happening to your bottom line locally. By the final lecture, you’ll understand just how interdependent the world’s markets have become; feel newly at ease in the realm of stocks, bonds, mutual funds, derivatives, and credit; and be better able to make informed decisions for your financial future.
Learn the Rules of the Game

To many of us, the financial markets seem to play by their own rules—and those rules make little logical sense. For example, when the unemployment rate rises, the stock market sometimes rises along with it. In a short sale, an asset is sold before it is bought. And in the high-stakes world of mergers and acquisitions, financial transactions are routinely done “on paper,” with massive companies being bought and sold despite no money changing hands. How can this be?

Presuming no prior experience in finance, Financial Literacy unravels these and other riddles as it walks you through the fascinating history of banking, which begins with medieval goldsmiths’ vaults, and the functions of the instruments and institutions that constitute the system as a whole.

Carefully connecting the dots each step of the way, Professor Fullenkamp demystifies industry jargon and explains how businesses, governments, and—primarily—households inject funds into the market, revealing that it’s our money flowing through this labyrinthine network that forms the bedrock of the system.

You’ll start the course with an overview of the six essential jobs the financial markets perform for society and how every financial transaction or product attempts to carry out at least one.

You’ll investigate how the markets

transfer resources across time and space, allowing you to buy a home without having the entire purchase price on hand;
pool resources and share ownership, making it possible for investors to collaboratively lend money to governments and buy into corporations;
discover financial prices, which can have serious consequences if assets are not set at the right level;
deal with information problems, thereby mitigating the risks associated with a lack of reliable information about borrowers;
clear and settle payments, allowing us to easily purchase items anywhere in the world; and
manage risks by providing safety nets with products like insurance.
Along the way, you’ll learn answers to questions you’ve likely pondered, from the reasons hedge funds are permitted to sidestep SEC regulation to what the letter grades used by Standard & Poor’s and other credit rating agencies really mean.

Along the way, you’ll learn answers to questions you’ve likely pondered, from the reasons hedge funds are permitted to sidestep SEC regulation to what the letter grades used by Standard & Poor’s and other credit rating agencies really mean.

How is your credit score calculated?
What information do lenders take into consideration when you apply for a loan?
Why do some stocks pay dividends while others don’t?
What happens to your mortgage after you sign on the dotted line?
How do currency exchange rates work, and how do they affect international investments?

Become a More Savvy Financial Consumer

Financial Literacy provides a solid foundation for both would-be investors and those who’ve been participating in this space for years without knowing how all the parts fit into the bigger picture. You’ll find out how stocks get introduced to the market; how U.S. dollars leave the country; and how market regulation actually protects healthy competition. You’ll also learn background on Fannie Mae, Freddie Mac, and mortgage-backed securities, as well as a plethora of practical information, including

how to calculate payments on amortizing loans;
why index funds are often a great choice for investors; and
how to read a company’s balance sheet and income statement.

In addition, these lectures offer a rare opportunity to peek inside hedge funds and the money market— territory typically closed to the average investor—as well as the turf battles that occur between the government’s appointed “referees.” You’ll also see how technology and the recent economic crisis are changing the rules around the world.

In the second half of the course, you’ll investigate which major economic indicators have the biggest impact on the markets, including central banks like the Federal Reserve. While you may regularly hear this enigmatic entity reported on in the media, you may not fully be aware of how the Fed’s monetary policy affects inflation, bank lending, and interest rates. But you will after you complete this course.

Objective Information from a Sought-After Expert

You could work your way through the bookstore’s entire finance section or watch hours of cable TV shows on money, but you’ll never encounter a better resource for this kind of robust, reliable, unbiased information. As both an accomplished educator and a consultant for the International Monetary Fund, Professor Fullenkamp presents each well-informed lecture in an encouraging, engaging manner that leads you to not only comprehend the material, but to get as excited about it as he does.

Add the professor’s outstanding guidance to the many explanatory graphs, animations, and graphics featured in video formats, and Financial Literacy: Finding Your Way in the Financial Markets yields an unparalleled learning experience. You simply won’t find a worthier investment to develop financial fluency.

Lectures

01 Feeling at Home in the Financial Markets
02 Where the Money Goes
03 Financial Markets Run on Information
04 Giving Credit Where Credit Is Due
05 The Fine Print
06 What Is Special about Banks?
07 Billion-Dollar IOUs—Using Bonds to Borrow
08 The Double Identity of Stocks
09 The Sell Job
10 The Mysterious Money Market
11 Think Globally, Lend … Globally
12 Trading Securities
13 Returns and Prices in the Secondary Market
14 The Truth about Pricing
15 A Tale of Two Funds
16 The Market for Corporate Control
17 What Companies Tell the Markets
18 What Moves the Markets
19 When Central Banks Talk, Markets Listen
20 Interest Rates as Indicators
21 Risk Management and Insurance
22 Mortgages and Securitization
23 The Whys and Hows of Financial Regulation
24 The Future of Finance

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Finding Your Way in the Financial Markets

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Finding Your Way in the Financial Markets

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Finding Your Way in the Financial Markets

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Finding Your Way in the Financial Markets

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