Management and Organizational Studies 1023A/B Lecture Notes - Lecture 1: Canada Savings Bond, Commercial Paper, Financial Intermediary

• School: Western University
• Department: Management and Organizational Studies
• Course: Management and Organizational Studies 1023A/B
• Professor: ALL

Document Summary

Finance is the study of how and under what terms savings (money) are allocated between lenders and borrowers. Finance is not just about how resources are allocated; it also examines under what terms and through what channels the allocations are made. When funds are transferred a financial contract comes into existence which are called financial securities. The difference between what is owned (assets) and what is owed (lia(cid:271)ilities(cid:895) is (cid:862)(cid:374)et (cid:449)o(cid:396)th(cid:863) o(cid:396) e(cid:395)uity. Three major domestic groups in the economy are individuals, referred to as the household sector, businesses and the government. When everything is added up the de(cid:271)ts to ou(cid:396)sel(cid:448)es (cid:374)et out to ze(cid:396)o (cid:271)e(cid:272)ause o(cid:374)e pe(cid:396)so(cid:374)"s de(cid:271)t is a(cid:374)othe(cid:396) pe(cid:396)so(cid:374)"s asset. Balance sheet shows all real assets according to six major classifications. Although balance sheets are useful for understanding wealth and the different types of real assets it removes most of the things that are of interest to students of finance.