The Financial Times Handbook of Financial Engineering, 3rd Edition

2

THE CASH MARKETS

2.1 Overview of financial markets

2.2 The foreign exchange market

2.3 The money markets

2.4 The bond markets

2.5 The equities markets

2.6 The commodities markets

2.7 Cash instruments versus derivatives

2.8 Capital adequacy requirements

This chapter provides a brief description of the cash markets, describing traditional financial markets such as the foreign exchange and money markets. This will provide the necessary foundation for studying the derivatives markets, the important markets within which the instruments of financial engineering are created and traded.

2.1 Overview of financial markets

With the developments in finance over the past 40 years, there may seem to be a bewildering array of financial products. To bring ...