Econ Ch9 Financial Institutions

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  • 1. Chapter Financial Institutions 9
  • 2. Chapter Objectives
    • Students will learn:
    • Basic functions of financial service institutions
    • Basic functions of financial intermediaries
    • Basic properties of stocks and bonds
  • 3. Financial Service Institutions S A V E R S B O R R O W E R S Can you think of any other types of borrowers? Interest Interest Interest Interest
  • 4. Business Growth
    • Profits vs. Lending
    • Savings is investing
    • Capital investments = economic growth
  • 5. Banking Products
    • Keeping Money Safe (insurance, FDIC)
    • Transferring Funds (portability, access)
    • Loaning Money (interest, investing)
  • 6.  
  • 7. stocks and bonds Primary Market Secondary Market Securities Market OTC Market BONDS STOCKS
  • 8. States of the Market Bull Market Bear Market
  • 9. RISK
    • Bear market = bigger risk
    • Mutual funds reduce risk
      • Shares in a company that invests in stocks and bonds of other companies
      • Diversification reduces risk
      • Expert analysis and advice
      • Dividends
  • 10.