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Unformatted text preview: o Government regulates this Regulatory Agencies- o Insider trading-knowing something that no one else does Undermines confidence in the market Ex. Martha Stewart o SEC- Securities and Exchange Commission Central Banks- System o Private banks were formally owned by monarchs who wanted to fund conquests o History of being secretive The Core Principles of Money and Banking 1. Time has value. scarcity, limited quantity, time also effect the value of your money a. (if you borrow money from the bank your loan rate will add interest to that money) The value of money in 10 years is different than in 5 years 2. Risk requires compensation. We will learn how to measure risk; wants to be compensated if taking on the risk a. Bond is debt- how risky is the debt- require very high interest rate (risk trimming)...
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This note was uploaded on 03/02/2011 for the course ECON 121 taught by Professor Labadie during the Spring '10 term at GWU.
- Spring '10