Chapter 1 Flashcards
This refer broadly to any marketplace where the trading of securities occurs
Financial Markets
These are what makes financial market work.
Financial Institution
Without this, financial markets would not be able to move funds from people who save to to have productive investment opportunities
Financial Institution
These are common among individuals and small business and in economies where financial markets and institutions are less developed.
Direct Funds
They play an important role in the financial system because they reduce transaction costs, allow sharing and solve problems created by adverse relation and moral hazard.
Financial Institution
The markets in which derivative securities trade
Derivative Security Markets
An agreement between two parties to exchange a standard quantity of an asset at a predetermined price on a specified date in the future
Derivative Security
Four categories of tradable commodities
Metals, Energy, Livestock and Meat, Agricultural
Is a market where buyers and sellers trade commodities, financial securities, foreign exchange, and other freely exchangeable items and derivatives of value at low transaction costs and at prices that are determined by market forces
Financial Markets
Depository institutions whose major assets are loans and major liabilities are deposits
Commercial Banks
Depository institutions in the form of savings and loans, credit union
Thrifts
Financial institutions that protect individuals and corporations from adverse events
Insurance Companies
Financial Institutions that underwrite securities and engage in securities brokerage and trading
Securities firms and Investment Banks
Financial Institutions that make loans to individuals and businesses
Finance Companies
Financial Institutions that pool financial resources and invest in diversified portfolios
Mutual Funds
