lecture 1 part 1 Flashcards
what is a barter
generally accepted as a medium of exchange and is a measure of value or means of payment
what is finance
the study of the allocation of money and how it is done
what is a real asset
tangible items owned by individuals and businesses
what are examples of real assets
residual structures
consumer durables
office towers, factories and mines
machinery and equipment
what is a financial asset
claim that one individual has on another or securities
what are examples of financial assets
consumer credit
loans
mortgages
what are the two intermediaries
market intermediaries and financial intermediaries
what do market intermediaries do
facilitate market transactions (provide a direct claim)
what do financial intermediaries do
invest funds on behalf of others and change the nature of transactions (provide an indirect claim)
who are the borrowers
government and businesses
what are the 4 financial intermedaries
banks, insurance, pension, mutual benefits
what do banks do
lend out deposits
what do insurance companies do
investment of premiums and pay out claims
what do pensions do
invest contributions and pay benefits upon retirement
how do pensions pay benefits upon retirement
CPP, defined benefit and defined contribution
