MFIN1021 Lecture Notes - Lecture 3: Money Market Fund, Primary Market, Stock Market
Document Summary
Financial intermediaries: connect households and firms together. Takes the savings of households/investors and provides financing for firms and households. Mutual funds: pool together money from investors to invest in stocks and bonds. Higher fees - manage lots of money and charge very high fees (2 & 20) - 2% flat rate and. Use leverage (borrow money) or buy riskier assets. Restricted to sophisticated investors - got to be smart. Activist: try to influence control (can take over bod) Fund set up by employer for employee retirement. Huge - 8 trillion dollars in assets. Lend money to households, credit cards, mortgage, car loans. Lend money to firms finance operations and new projects. Helps firms raise money by underwriting stocks and bonds in primary markets. Essentially promising to buy the shares that aren"t sold when the bank goes public. Also helps them decide price and things. Helps firms do mergers and acquisitions as well as structuring these things.
