Market Organization and Structure

CFA level I / Equity Investments: Market Organization, Market Indices, and Market Efficiency / Market Organization and Structure

Learning Outcome Statements

1. Functions of the financial system
a. explain the main functions of the financial system;

2. Classification of assets and markets
b. describe classifications of assets and markets;

3. Major types of assets
c. describe the major types of securities, currencies, contracts, commodities, and real assets that trade in organized markets, including their distinguishing characteristics and major subtypes;

4. Financial Intermediaties
d. describe types of financial intermediaries and services that they provide;

5. Positions in an asset
e. compare positions an investor can take in an asset;

6. Leveraged positions and margin call
f. calculate and interpret the leverage ratio, the rate of return on a margin transaction, and the security price at which the investor would receive a margin call;

7. Execution, validity, and clearing instructions
g. compare execution, validity, and clearning instructions;
h. compare market orders with limit orders;

8. Primary and secondary markets
i. define primary and secondary markets and explain how secondary markets support primary markets;

9. Quote-driven, order-driven, and brokered markets
j. describe how securities, contracts, and currencies are traded in quote-driven, order-driven, and brokered markets;

10. Characteristics of a well-functioning financial system
k. describe characteristics of a well-functioning financial system;

11. Objectives of market regulation
l. describe objectives of market regulation;

Market Organization and Structure: Chapter Test
10 Questions, 15 Minutes

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