ECON 2020U Chapter Notes - Chapter 8: Mutual Fund, Financial Industry Regulatory Authority, Credit Risk
Document Summary
Financial system > the group of institutions in the economy that help to matc h one person"s saving with another person"s investment. ~!~ financial institutions and the canadian economy ~!~ The purpose of the financial system is to move the money that some peo ple want to save into the hands of other people who want to borrow. Financial markets > the institutions through which a person who wants to save can directly supply funds to a person who wants to borrow. Two most important financial markets in canadian economy are s tocks and bonds. Selling bonds to raise money is called debt finance. Date of maturity > the time by which the loan taken out (bond) will be repaid to someone else. A buyer can hold a bond until the date of maturity or sell it. The government usually issues bonds to build schools, fund the militar y, build infrastructure, etc. Two characteristcs are important in a bond:
