The Financial Market Environment - Financial Institutions and Markets

9 important questions on The Financial Market Environment - Financial Institutions and Markets

What are financial institutions?

an intermediary that channels the savings of individuals, businesses, and governments into loans or investments.

What are commercial banks?

Institutions that provide savers with a secure place to invest their funds and that offer loans to individual and business borrowers.

What are investment banks?

Institutions that assist  companies in raising capital, advise firms on major transactions such as mergers or financial restructurings, and engage in trading and market making activities.
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What is a shadow banking system?

A group of institutions that engage in lending activities but do not accept deposits and therefor are not subject to the same regulations as traditional banks.

What is a private placement?

The sale of a new security directly to an investor or group of investors.

What is a money market?

A financial relationship created between suppliers and demanders of short-term funds.

What is a bond?

Long-term debt instrument used by business and government to raise large sums of money, generally from a diverse group of lenders.

What is a preferred stock?

special form of ownership having a fixed periodic dividend that must be paid prior to payment of any dividends to common stockholders.

What is a broker market?

the securities exchanges on which the two sides of a transaction, the buyer and seller, are brought together to trade securities.

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