Financial Systems
What are financial systems
What is a set of institutions that permit the exchange of funds
Institution that collects money from savers and invests the funds in financial assets
What is a financial intermediary
Any place or system that provides buyers and sellers the means to trade financial securities
What are financial markets
Debt issued by the US Government to support government spending
What is a government bond
Those who have excess money to invest while investors require money to invest.
What are savers?
Two groups in a financial intermediary
What are Borrowers and Lenders
Where long term financial assets are bought and sold
What is Capital Market
Security that represents the ownership of a fraction of the issuing company.
What is a stock
Someone who receives an amount of money and undertakes to pay it back, together with interest, within a certain period of time
What are borrowers?
Example of financial intermediary
What are banks, mutual funds, pension funds (etc.)
Where are short term financial assets bought and sold?
What is a money market
What does ETF stand for?
What are exchange traded funds
Bank name of second largest US bank crash
What is Silicon Valley Bank?
When investors or companies invest money in a new company in return for a portion of the company in hopes that they get a large return on their investment
What is venture capital
Where financial assets can be resold
What is a secondary market
Debt issued by a corporation to fund expansion, improvements, acquisitions, etc.
What is a corporate bond
How do banks make money
What is by taking your money in return for a savings or checking account, giving it to borrowers at higher interest rates, pays your interest through what the borrowers paid, and then take a cut of the money
An investment fund that pools money from many investors to purchase securities.
What are mutual funds
Buying financial assets directly from the user
Primary market
A type of savings account that keeps your money without withdrawals for a specific amount of time.
What is a certificate of deposit