ECO349H5 Chapter Notes - Chapter 3: Foreign Exchange Market, Repurchase Agreement, Money Market

79 views4 pages
School
Department
Course
Professor

Document Summary

They provide an essential economic function of channelling funds from households, firms, and governments that have a surplus to those that have a shortage. Direct finance - borrowers borrow funds directly from lenders in the financial market by selling lenders securities (financial instruments) which are claims on the borrowers future income or asset. Without financial markets a borrower and lender may never meet up. Financial markets are critical for producing an efficient allocation of capital. Debt and equity markets - a firm or individual can obtain funds through issuance of a debt instrument such as bond or mortgage or through issuing equities. Short term debt - less than a year. Long term debt - more than a year. Maturity - point at which the instrument expires. Equity - common stock which is a claim on the net income. Dividends - periodic payments on an equity.

Get access

Grade+20% off
$8 USD/m$10 USD/m
Billed $96 USD annually
Grade+
Homework Help
Study Guides
Textbook Solutions
Class Notes
Textbook Notes
Booster Class
40 Verified Answers
Class+
$8 USD/m
Billed $96 USD annually
Class+
Homework Help
Study Guides
Textbook Solutions
Class Notes
Textbook Notes
Booster Class
30 Verified Answers

Related textbook solutions

Related Documents