Textbook Notes (378,520)
CA (167,148)
UTSC (19,212)
MGT (1,095)
MGTA02H3 (363)
Chapter 8

Chapter 8 summary notes

3 Pages
120 Views

Department
Management (MGT)
Course Code
MGTA02H3
Professor
Chris Bovaird

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WHAT IS MONEY
-value of money can fluctuate & can have big effect on country and ppl
The Characteristics of Money
-money: any object generally accepted by ppl as payment for goods & services. (has to have
portability, divisibility, durability, stability)
The Fluctuations of Money
-money serves 3 functions
-medium of exchange; we use money to buy and sell things
-store of value; money can be used for future purchases
-unit of account; lets us measure the relative values of goods and services
Credit Cards: Plastic Money?
-credit cards are money substitute; they serve as a temporary medium of xchange but are not a
store of value
-they’re convenient and extremely profitable (from annual fees/interest and fees from merchants
that accept credit card)
THE CANADIAN FINANCIAL SYSTEM
-many forms of money depend on existence of financial institutions to provide services to
business and individuals
Financial Institutions
-there are a variety of financial intermediaries in Canada, vary in size, importance and types of
sources they appeal to.
-financial community in Canada is divided into 4 distinct legal areas; chartered banks, alternate
banks (trust companies), life insurance companies, investment dealers.
FINANCIAL PILLAR #1 - CHARTERED BANKS
-chartered bank: a privately owned, profit-seeking firm that serves individuals, non-business
organizations, and businesses as a financial intermediary.
-offer savings, chqing accounts, loans (main source of short term loans for businesses)
-largest & most important.
-Initially liability took the form of bank notes
-Canada has a branch system (a few big banks with many branches)
Services Offered by Banks
-pension services; help customers establish savings plans for retirement
-trust services: the management of funds left “in the bank’s trust” (making your monthly bill
payments, managing your investment portfolio...)
-international services;
-currency exchange
-letter of credit: a promise by the bank to pay $ to a business firm (under conditions)
-bankers acceptance: a promise that the bank will pay a specified amount of $ @ future
date
MGTA04 Chapter 8
1
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Description
MGTA04 Chapter 8 WHAT IS MONEY - value of money can uctuate & can have big effect on country and ppl The Characteristics of Money - money: any object generally accepted by ppl as payment for goods & services. (has to have portability, divisibility, durability, stability) The Fluctuations of Money - money serves 3 functions - medium of exchange; we use money to buy and sell things - store of value; money can be used for future purchases - unit of account; lets us measure the relative values of goods and services Credit Cards: Plastic Money? - credit cards are money substitute; they serve as a temporary medium of xchange but are not a store of value - theyre convenient and extremely protable (from annual feesinterest and fees from merchants that accept credit card) THE CANADIAN FINANCIAL SYSTEM - many forms of money depend on existence of nancial institutions to provide services to business and individuals Financial Institutions - there are a variety of nancial intermediaries in Canada, vary in size, importance and types of sources they appeal to. - nancial community in Canada is divided i
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