ECO349H1- Final Exam Guide - Comprehensive Notes for the exam ( 22 pages long!)
Document Summary
Capital market instruments: debt and equity instrument with maturities of greater than one year, stocks, stocks are equity claims on the net income and assets of a corporation, about less than 1% shares every year. International bond market, eurobonds, and eurocurrencies: the traditional instruments in the international bond market are known as foreign. States or in foreign branches of u. s banks. World stock markets: the increased interest in foreign markets has prompted the development of canadian mutual funds that specialize in trading in foreign stock markets. Function of financial intermediaries indirect finance: financial intermediation: is the primary route for moving funds from lenders to borrowers. Increasing information available to customers: government regulation can reduce adverse selection and moral hazard problems in financial markets and enhance the efficiency of the markets by increasing the amount of information available to the customers. Restrictions to entry: have created tight regulations governing who is allowed to set up a financial intermediary.
