ECON 1000 Chapter Notes - Chapter 8: Dow Jones Industrial Average, Nyse American, Autarky
26 Mar 2017
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Chapter 8 - saving, investment, and the financial system. The financial system: the group of institutions that help to match one person"s saving with another person"s investment, the financial system moves the economy"s scarce resources from savers to borrowers. Financial institutions in the canadian economy: financial markets: institutions through which savers can directly provide funds to borrowers. A certificate of indebtedness that specifies obligations of borrowers to the holder of the bond. Credit risk: probability that the borrower will fail to pay some of the interest or principal. Stock represents a claim to partial ownership in a firm and is therefore, a claim to the profits that the firm makes. Sales of stock to raise money - equity financing. Compared to bonds, stocks offer both higher risk and potentially higher returns. Most important stock exchange in canada is the toronto stock exchange (tsx) Most important stock exchanges in the united states are the new york stock.
