ECON 2035 Lecture 2: Chapter 1(1)
Document Summary
Chapter 1: introducing money and the financial system: financial assets, financial institutions, the federal reserve & other regulators, risk sharing, liquidity, information, components of the financial system. Securities (financial instruments): are tradable assets that gives the owner (the lender) a claim on the issuers (the borrowers) future income or assets. There are two types of securities: debt security: a type of security requires the issuer to repay the borrowed money, with the terms that specifies the interest rate and maturity date. **note a security is an asset to the person who purchases the security (the lender) but a liability to the person who sells them (the borrower)