BUAD110 Chapter Notes - Chapter 2, 3, 14: Money Market, Capital Market, Airbnb
21 Feb 2018
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Chapter 14: financial systems, money & banking, + legal (fraud) Financial systems: the financial marketplace: instruments, markets, and institutions. Money market instruments: short term securities (< 1 year) Allocational efficiency: transfer of savings to the most profitable investments. Operational efficiency: producing services at the lowest cost. Market efficiency: ability of stock prices to rapidly reflect available information. Financial holding company: a service offering banking, securities, and insurance. Consolidation movement: wave of mergers and acquisitions. Unit of account: function of money to serve as value of goods and services. Store in value: function of money to retain it"s value overtime. Standard of deferred payment: function of money to be employed in recording the amount of debt payments. Commodity money: coins made out of metals. Fiat money: valuable money because the gov"t deems it so. Gold standard: backing of money with gold at a fixed exchange rate per ounce. Hard currency: relatively stable in value, soft currency: issued by emerging markets.
