How do financial markets and institutions affect businesses and individuals? How do firms raise funds? How can an individual use markets and institutions to meet their own personal goals? In order to answer these questions, a reader must have a strong understanding of financial markets and institutions. This concise book provides the necessary information, presenting the general principles of finance and showing how they are applied in the field.Preface.Acknowledgments.Part I: Basic Financial Principles.1. Introduction to Finance.Introduction.1.1 Why Study Finance?1.2 What Is Finance?1.3 Four Principles of Finance.1.4 The Financial System. 1.5 Financial Functions.1.6. Types of Financial Institutions.1.7 Types of Financial Markets.1.8 Types of Securities.1.9 International Securities and Markets.2. Money and Interest Rates.Introduction.2.1 Overview of the Monetary System.2.2 The Federal Reserve System.2.3 The Development of Money in the United States.2.4 U.S. Money Supply Today.2.5 Money Supply and Economic Activity.2.6 Interest: The Cost of Money.2.7 Structure of Interest Rates.2.8 The Yield Curve.3. Time Value of Money.Introduction.3.1 The Math of Finance.3.2 Compounding to Determine Future Values.3.3 Inflation or Purchasing Power Implications.3.4 Discounting to Determine Present Values.3.5 Finding Interest Rates and Time Requirements.3.6 Future Value of an Annuity.3.7 Future Value of an Annuity Due.3.8 Frequent Compounding or Discounting Intervals.3.9 APR Versus EAR.3.10 Cost of Consumer Credit.4. Financial Statements, Cash Flow and Taxes.