Chapter 17 - > > >...

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Unformatted text preview: > > > > > > > > The Financial System Chapter 17 L e a r n i n g G o a l s Outline the structure and importance of the financial system. List the various types of securities. Define financial market, and distinguish between primary and secondary financial markets. Describe the characteristics of the major stock exchanges. Discuss the organization and functioning of financial institutions. Explain the functions of the Federal Reserve System and the tools it uses to control the supply of money and credit. Evaluate the major features of regulations and laws affecting the financial system. Describe the global financial system. 1 2 3 4 5 6 7 8 T h e F i n a n c i a l S y s t e m The financial system is the process by which money flows from savers to users. U n d e r s t a n d i n g t h e F i n a n c i a l S y s t e m Financial System Savers Users Financial Institutions Financial Markets Savings is a function of many variables. Funds can be transferred between users and savers directly or indirectly. T y p e s o f S e c u r i t i e s Securities Financial instruments Obligations on the part of the issuer Businesses and Governments Provide rate of return to purchasers Money Market Instruments Bonds Stock M o n e y M a r k e t I n s t r u m e n t s Short-term Debt Securities Issued by governments, financial institutions and corporations Investors are paid interest for the use of their funds. Generally low-risk U.S. Treasury bills, commercial paper, and bank certificates of deposit B o n d s Government Bonds Bonds sold by the U.S. Department of the Treasury....
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Chapter 17 - > > >...

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