Jagdambay Exports

1. Explain the components of a financial market and its relevance to Jagdambay Exports. Be explicit and explain to the CFO how financial markets differ from markets for physical assets and why that difference matters to Jagdambay Exports

A financial market brings together and combines both buyers and sellers to conduct the trading of financial assets like stocks, currencies, commodities, and bonds. The key aim of the financial market is to establish prices for international trade, raising capital and the transference of risk and liquidity. There are several different components of a financial market. First, money markets are utilized by the government and corporate establishments as a way for borrowing and loaning in the short-range period, more often than not for assets being held for up until one financial year. In contrast, capital markets are more often than not utilized for longstanding assets, which are delineated as the ones with maturities that surpass one financial year. Third, there is the commodity market which makes it possible for trading in commodities. A fourth component is the derivatives market, which focuses on sharing of financial risk together with risk management (Zucchi, 2018).

It is imperative to note that there is a significant difference between financial markets and markets for physical assets. On the one hand, physical assets markets are also referred to as real, commodity and tangible markets. In delineation, this kind of market copes with tangible products and commodities. For instance, in the case of Jagdambay, physical assets markets are where the company retails its tangible products such as baby garments. On the other hand, the financial asset markets takes into account markets that cope with financial instruments like bonds, stocks, and mortgages. The value of these financial instruments is reliant on what occurs on the value of other assets, the implication of which that they have prescribed requirements that warrant the holders of these instruments to distinctive privileges and entitlements on real assets. This difference matters to the organization for the reason that physical assets markets is where Jagdambay will sell its tangible products and commodities whereas the financial assets markets is where the company will be able to sell shares on its initial product offering (IPO) when going public (Brigham and Houston, 2012). Financial markets are important to Jagdambay for the reason that individual and organizations endeavoring to borrow...

Explain the relevance of money markets and capital markets for Jagdambay Exports

Money markets take into account the transactions in short-range debt instruments that are by and large issued by borrowers that have considerably high credit ratings. The key financial instruments that are issued and traded within the money market are significantly liquid debt securities and comprise of commercial papers and treasury bills. These are imperative for Jagdambay Exports for the reason that they are largely sage investments returning comparatively low rates of interest that are suitable for short term necessities. On the other hand, capital markets are dissimilar kinds of financial markets coping with the trading of particular kinds of stocks and bonds. Notably, these markets can either have to do with newly issued bonds or stocks. The significance for Jagdambay exports is that capital markets are for long-standing financial instruments (Brigham and Houston, 2012).

3. Analyze Jagdambay exports and...

…that have buy orders. As a result, the exchange functions as auction markets. On the other hand, over-the-counter market can be delineated as a huge gathering of brokers as well as dealers interlinked electronically by means of telephones and computers that offer for trading in unlisted securities. In the case of Jagdambay exports, the physical exchanges would be considered to be the most ideal approach owing to the fact that the companys stock will be listed and therefore exchanges can be done un the formal tangible physical entities (Brigham and Houston, 2012).

6. Summarize the U.S. financial system advice to the CFO and provide a timeline of expected outcomes based on your advice. (This should be no more than a paragraph or two).

I expect Jagdambay exports to conduct an initial public offering (IPO) of its stock in order to raise capital. This will take part in the money markets owing to the fact that the stock are short-term financial instruments and will be transacted within the primary market. This will be conducted through the three approaches including direct transfer of money and securities, via an investment banking entity, or via a financial intermediary. Since the company will be listed, the transactions will take place through physical exchanges which are official tangible physical entities that conduct auction markets in listed securities.

7. Finally, write 2 -3 sentences about what you learned regarding the U.S. financial system based upon this assignment.

Conducting this assignment has been largely insightful on understanding the financial system of the United States. Ranging from the components of the financial market, trading of securities to the transference of capital between savers and borrowers, the market is prime for expansion of…