RSM100Y1 Chapter Notes - Chapter 16: Dbrs, Michael Bliss, Corporate Bond
Document Summary
Prime rate of interest: the lowest rate charged by banks to their customers. Trade creates wealth in two ways: profit for the consumers and savings for the producers. According to historian michael bliss: business has worked w/ or through government to a greater extent in canada than in the united states. Turn into savers when older -- have own job to pay for spending. User raises the needed funds directly from savers. Funds flow through financial markets / financial institutions. Local school district sells bonds to investors in the financial market. District uses funds from sale to pay for new school. Investor receive interest each year for their money. Customer deposits & uses the fund to make loans to businesses and households. Securities: financial instruments that represent the obligations of the issuers to provide the purchasers w/ the expected stated returns on the funds invested or loaned.
