Economics > EXAM > Summary The Economics of Money, Banking and Financial Markets Questions and Answers [Level A+] (All)
Summary The Economics of Money, Banking and Financial Markets Questions and Answers [Level A+]
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Financial Markets - -Markets in which funds are transferred from people who have an excess of available funds to people who have a shortage. Bonds and stock markets, -security - -(also called finan... cial instrument) is a claim on the issuers future income or assets -assets - -any financial claim or piece of property that is subject to ownership -bond - -is a debt security that promises to make payments periodically for a specified period of time. bond market: enables corporations and governments to borrow to finance their activities and because it is where interest rates are determined -interest rate - -is the cost of borrowing or the price paid for the rental of funds (usually expressed as a percentage of the rental of $100 per year) -stock market - -(typically just called a stock) represents are share of ownership in a corporation. a security that is a claim on the earnings and assets of the corporation. issuing stock and selling it to the public is a way for corporations to raise funds to finance their activities -structure of financial system - -financial system is complex, comprising many different types of private sector financial institutions, including banks, insurance companies, mutual funds, finance companies, and investment banks, all of which are heavily regulated by the government -financial intermediaries - -institutions that borrow funds from people who have saved and in turn make loans to others [Show More]
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