REE-4204 Study Guide - Comprehensive Final Exam Guide - Mortgage Loan, Interest Rate, Debtor
20 Nov 2018
School
Course
Professor
Document Summary
Savings investment cycle: the financial marketplace is the system whereby savings are transferred from what are termed surplus income units to what are termed deficit income units. Financial intermediaries: financial institutions that channel funds from the surplus income units to the deficit income units, commercial banks- accept demand and time deposits, thrift institutions- s&l associations; mutual savings banks; credit unions. Investment companies- pool the funds of savers and invest the funds in a portfolio of assets. Direct financing: when the flow of funds takes place without the use of intermediaries. Primary mortgage market: the market where mortgages are originated, originators either hold mortgages in portfolios or sell them into the secondary mortgage market. Interest rate on an instrument reflects general market rates and the risk of the specific instrument: transition mechanism of money and interest rates, money supply economy inflation inflationary expectations credit markets interest rates.
