Module 2 Flashcards
SAVERS
Households
-Individuals
-Corporations/Companies -Government Agencies
Financial Intermediaries
-Banks
-Insurance Companies
-Stock Exchange
-Stock brokerage firms
-Mutual Funds
Users of Funds (Borrowers/Investors)
-Households
-Individuals
-Corporations/Companies -Government Agencies
links the savers and the users of funds.
financial system
are companies in the financial sector that provide a broad range of business and services including banking, insurance, and investment management.
Financial institutions
which use the deposited funds to provide commercial loans to firms and personal loans to individuals,
Commercial Banks
- Individuals purchase insurance (life, property and casualty, and health) protection with insurance premiums.
Insurance Companies
examples of financial institutions/Intermediaries
Commercial banks
Insurance banks
Mutual funds
Pension Funds
owned by investment companies that enable small investors to enjoy the benefits of investing in a diversified portfolio of securities purchased on their behalf by professional investment managers.
Mutual funds
Financial institutions that receive payments from employees and invest the proceeds on their behalf.
Pension Funds
-is a real or a virtual document representing a legal agreement involving some sort of monetary value.
Financial Instruments
is any asset that is:
• Cash
Financial Asset
is any liability that is a contractual obligation:
Financial Liability
is any contract that evidences a residual interest in the assets of an entity after deducting all liabilities.
Equity Instrument
generally have fixed returns due to fixed interest rates.
Debt Instruments