Guide to Financial Markets

Extensively revised and updated, this fourth edition brings the reader up to speed with the latest developments in financial markets, providing a brilliantly clear guide to a complex world that even those who work in it often find hard to understand.

Extensively revised and updated, this fourth edition brings the reader up to speed with the latest developments in financial markets, providing a brilliantly clear guide to a complex world that even those who work in it often find hard to understand…

Financial markets have been around ever since mankind settled down to growing crops and trading them with others. After a bad harvest, those early farmers would have needed to obtain seed for the next season’s planting, and perhaps to get food to see their families through. Both of these transactions would have required them to obtain credit from others with seed or food to spare. After a good harvest, the farmers would have had to decide whether to trade away their surplus immediately or to store it, a choice that any 20th-century commodities trader would find familiar. The amount of fish those early farmers could obtain for a basket of cassava would have varied day by day, depending upon the catch, the harvest and the weather; in short, their exchange rates were volatile.

Financial markets have been around ever since mankind settled down to growing crops and trading them with others. After a bad harvest, those early farmers would have needed to obtain seed for the next season’s planting, and perhaps to get food to see their families through. Both of these transactions would have required them to obtain credit from others with seed or food to spare. After a good harvest, the farmers would have had to decide whether to trade away their surplus immediately or to store it, a choice that any 20th-century commodities trader would find familiar. The amount of fish those early farmers could obtain for a basket of cassava would have varied day by day, depending upon the catch, the harvest and the weather; in short, their exchange rates were volatile.