Includes glossary and index.

Contents: Part One: Introduction: Why study financial markets and institutions? -- Overview of the financial system -- Part Two: Fundamentals of financial markets: What do interest rates mean and what is their role in valuation? -- Why do interest rates change? -- How do risk and term structure affect interest rates? -- Are financial markets efficient? -- Part Three: Central banking and the conduct of monetary policy: Structure of central banks and the federal reserve system -- Conduct of monetary policy:tools, goals, and targets -- Part Four: Financial markets: The Money markets -- The Bond market -- The Stock market -- The Mortgage markets -- The Foreign exchange market -- The International financial system -- Part Five: Fundamentals of financial institutions: Why do financial institutions exist? -- What should be done about conflicts of interest in the financial industry? -- Part Six: The Financial institutions industry: Banking and the management of financial institutions -- Commercial banking industry:structure and competition -- Savings association and credit unions -- Banking regulation -- The Mutual fund industry -- Insurance companies and pension funds -- Investment banks, security brokers and dealers, and venture capital firms -- Part Seven: The Management of financial institutions: Risk management in financial institutions -- Hedging with financial derivatives -- Finance companies.