EC202 1nd Edition Lecture 16 Outline of Last Lecture I. Allocation of savingsOutline of Current Lecture II. Financial marketsCurrent Lecture-financial markets: the collections of households, firms, governments, banks, and other financialinstitutions that lend and borrow-global financial markets: lenders seek the highest possible real interest rate, and borrowers seek the lowest possible real interest rate in a single global financial market-organized in four groups:-1. bond markets-bond: a promise to pay specified sums of money on specified dates: a debt for the issuer-bond market: a financial market in which bonds issued by firms and governments are traded-2. stock markets-stock: a certificate of ownership and claim to the profits that a firm makes-stock market: a financial market in which shares of companies’ stocks are traded-3. short-term securities markets-short-term securities: include commercial bills and treasury bills )promises by large firms and government to pay an agreed sum no longer than one year in the future)These notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.-4. loans markets-banks and other financial institutions lower the cost of financing firms’ capital expenditures by accepting short-term deposits and making longer-term
View Full Document
Unlocking...