EC223 Lecture Notes - Lecture 1: Interest Rate, Financial Instrument, Money Supply
Document Summary
Markets in which funds are transferred from people who have an excess of available funds to people who have a shortage: bond and stock markets; these are crucial to promoing greater economic eiciency. Is a inancial instrument claim on the issuer"s future income or assets. Debt security that promises to make payments periodically for a speciied period of ime. Cost of borrowing or the price paid for the rental of funds. Represents a share of ownership in a corporaion; a security that is a claim on the earnings and assets of the corporaion. The inancial system is complex, comprising many types of private sector inancial insituions, including banks, insurance companies, mutual funds, inance companies, and investment banks, all of which are heavily regulated by the government. Insituions that borrow funds from people who have saved and in turn make loans to others.
