Class Notes (835,374)
Canada (509,147)
MGTA02H3 (143)

Chapter 10 Notes.docx

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Management (MGT)
Bill Mc Conkey

Chapter 10: Understanding Money and Banking Terms: Money: any object generally accepted by people as payment for goods and services Chartered Bank: a privately owned, profit-seeking firm that serves individuals, non-business organizations, and businesses as a financial intermediary Trust Services: the management of funds left “in the bank’s trust” Letter of Credit: a promise by a bank to pay money to a business firm if certain conditions are met Banker’s Acceptance: a promise that the bank will pay a specified amount of money at a future date Chequable Deposit: a chequing account Term Deposit: money that remains with the bank for a period of time with interest paid to the depositor Prime Rate of Interest: the lowest rate charged to borrowers Reserve Requirement: the requirement that banks keep a portion of their chequable deposits in vault cash or as deposits with the Bank of Canada Electronic Funds Transfer: a financial service that combines computer and communication technology to transfer funds or information into, from, with, and among financial institutions Debit Card: a plastic card that, immediately on use, reduces the balance in the user’s bank account and transfers it to the store’s account Point-of-sale (POS) Terminal: electronic device that allows customers to pay for retail purchases with debit cards Smart Card: a credit card-sized plastic card with an embedded computer chip that can be programmed with “electronic money” Ecash: money that moves among consumers and businesses via digital electronic transmissions Life Insurance Company: a mutual or stock company that shares risk with its policyholders for payment of premiums Factoring Company: buys accounts receivable from a firm for less than their face value, and then collects the face value of the receivables Sales Finance Company: specializes in financing instalment purchases made by individuals or firms Consumer Finance Company: makes personal loans to consumers Venture Capital Firm: provides funds for new or expanding firms thought to have significant potential Pension Fund: accumulates money that will be paid out to plan subscribers in the future Trust Company: safeguards funds and estates entrusted to it; may also serve as trustee, transfer agent, and registrar for corporations Credit Union: co-operative savings and lending association formed by a group with common interests Law of One Price: the principle that identical products should sell for the same price in all countries The Characteristics of
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