AFM121 Study Guide - Midterm Guide: Profit Motive, Life Insurance, Financial Institution

• School: University of Waterloo
• Department: Accounting & Financial Management
• Course: AFM121
• Professor: Barry Mc Clinchey

Document Summary

Introduction to global financial markets afm 121. Topic 1 overview of the financial systems. Lender-savers those who have saved and are lending funds. Borrower-spender those who must borrow funds to finance their spending. Securities (financial instruments) claims on the borrower"s future income or assets; asset for the person who buys them but liabilities for the individual or firm that sells them. Financial markets that are operating efficiently improve the economic welfare of everyone in the society. 1 and then sells them to the public. A corporation acquires new funds only when its securities are first sold in the. Investment bank assists in the initial sale of securities in the primary market. Underwriting investment banks guarantees a price for a corporation"s securities. Brokers are agents of investors who match buyers with sellers of securities. Dealers link buyers and sellers by buying and selling securities at stated prices. Exchanges where buyers and sellers of securities meet in one central location to.