ACT 3070 Lecture Notes - Lecture 2: Investment Banking, Soybean, Ticker Tape
Document Summary
True of false: in a well functioning economy, capital flows efficiently from those who supply capital to those who demand it. Suppliers of capital: individuals and institutions with "excess funds"; these groups are saving money and looking for a rate of return on their investment. Demanders or users of capital: individuals and institutions who need to raise funds to finance their investment opportunities. These groups are willing to pay a rate of return on the capital they borrow. Ex: i sell my vehicle directly to my brother. Ex: you go to a charles schwab branch to invest money. They act as a middleman, match borrowers to savers. Ex: you deposit money into a 5 year cd at a bank; the bank uses those funds to loan to an individual to purchase a car. A venue where goods and services are exchanged.
