Financial Markets Flashcards
primary financial market
where financial securities are issued for the first time. e.g. when a company first floats
Secondary financial markets
where financial securities are bought or sold e.g. asx
consumer credit
short term debt for households e.g. credit cards or personal loans
housing loans
mortgage loans which are secured by property, repayable over the long term at fixed or variable rates of interest
business loans
short and long term finance to finance cash flow and investment spending
short term money market
the market for cash involving banks and the RBA
role of the share market
provides a place for the trading of shares in publicly listed companies. Links companies with investors looking for a return via dividends
role of the RBA
responsibility for the conduct of monetary policy and the maintenance of financial system stability. they are lenders for the australian government and banks. they also print money and set the cash rate
borrowers in financial markets
households/businesses/government
households as borrowers in the financial market
borrow money to fund houses, holidays and to use their credit cards
businesses as borrowers in the financial market
businesses borrow money to finance cash flow and investment spending
lenders in financial markets
households/businesses/government/international
international as lenders in financial markets
lend money to aus
households as lenders in financial markets
deposit their funds into banks who then lend to others in the economy
interest rates
the percentage cost of borrowing funds in the financial markets
