BU111 Lecture 5: Class 5 Notes (With text book notes form chapter 6)
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BU111 Full Course Notes
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Document Summary
Financial institutions are those that redirect societies resources from areas that have a positive cash flow to areas that have a negative cash flow. Traditionally there have been 4 legal areas in which theses institution have been divided into: chartered banks - privately owned, for-profit bank, that serves the general public as a financial intermediary (ex. Deposits, withdrawals, loans: alternate banks - banks that do not have the exact same structure as chartered banks but serve similar functions (ex. Investment dealers - people who issue new stocks on bonds for people to invest in. Other sources of funding may include government financing institutions (ex. The value of a nation"s currency depends on the supply and demand for that currency. Currencies will fluctuate in relative value for several reasons such as commodity prices and global stock market conditions. Governments can take actions to devalue, make the currency worth less. Governments can also take action to revalue, make the currency worth more.
