RSM100Y1 Chapter Notes - Chapter 16: Initial Public Offering, United States Treasury Security, Financial System
Document Summary
The mechanism by which money flows from savers to users. Almost all businesses, governments, and individuals participate in the financial system. 4 key components to the system (presented in order) Also called financial instruments, that represent the obligations of the issuers to provide the purchases with the expected stated returns on the funds invested or loans. These are ways for the government to borrow funds from the savers. Short term debt securities issues by governments, financial institutions and corporations. All the money they make matures within one year, they also pay interest to the investors. They are low risk: treasury bills: short term securities issues by the canadian treasury and backed by the full faith and credit of the canadian government. Creditors of a corporation or government body. They are issued at various prices 1-25k. Each has a rate of interest and maturity date. Government of canada mature in 10 years, but can be cashed in at anytime.
