Financial markets


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Financial markets

  1. 1. Financial Markets Economics 2
  2. 2. Saving and Investing <ul><li>Investment is the act of redirecting resources from being consumed today so that they may create benefits in the future </li></ul><ul><li>It is all about profit! </li></ul><ul><li>Contributes to a nation’s wealth-promotes growth </li></ul>
  3. 3. The Financial System <ul><li>Allows for the transfer of money to take place </li></ul><ul><li>People use financial assets, or promises that the borrower will pay them back </li></ul><ul><li>All of this allows for new products and development </li></ul>
  4. 4. Financial Intermediaries <ul><li>Institutions that help channel funds from savers to borrowers </li></ul><ul><ul><li>Banks, credit unions, finance companies </li></ul></ul><ul><li>Risk:spread the wealth! Invest in more than one thing! </li></ul>
  5. 5. Activity <ul><li>You are going to be an investment counselor for two investors, Tom and Rachel. </li></ul><ul><li>Evaluate each investor’s personal and financial situation, assess trade-offs between risk and return, and then make recommendations about how much risk that investor should assume and the types of investments he or she should make. </li></ul>