1、4.Money :Money is defined as anything that is generally accepted in payment for goods or services or in the repayment of debts. 5.Foreign exchange market :The foreign exchange market is where this conversion takes place,so it is instrumental in moving funds between countries.6.Foreign exchange rate
2、: the price of one countrys currency in terms of anothers.Questions and answersNum.1:Why study money ,banking and financial markets? A:1.To examine how financial markets such as bond ,stock and foreign exchange markets work. 2.To examine how financial institutions such as banks and insurance compani
3、es work. 3.To examine the role of money in the economy.Num.2:What is the banking and financial institution? 1. financial intermediaries,institutions that borrow funds from people who have saved and in turn make loans to others. 2. Banks are financial institutions that accept deposits and make loans.
4、 3.Other financial institutionsinsurance companies,finance companies,pension funds,mutual funds and investment banks.Num.3:How we will study money ,banking and financial markets?A:1. Exploring the Web 2.Collecting and Graphing Data.Chapter 2 An overview of the Financial System1.Capital(资本) :wealth,e
5、ither financial or physical,that is employed to produce more wealth.2.Primary market :A primary market is a financial market in which new issues of a security,such as a bond or a stock,are sold to initial buyers by the corporation or government agency borrowing the funds.3.Secondary market :A second
6、ary market is a financial market in which securities that have been previously issued can be resold.4.Exchanges (证券交易所):where buyers and sellers of securities (or their agents or brokers) meet in one central location to conduct trades.5.Capital market :The capital market is the market in which longe
7、r-term debt and equity instruments are traded.Num.1:How could Secondary markets be organized?Secondary markets can be organized in two ways. One method is to organize exchanges,where buyers and sellers of securities (or their agents or brokers) meet in one central location to conduct trades.The othe
8、r method of organizing a secondary market is to have an over-the-counter (OTC) market.How to distinguish between money and capital market?Money market securities are usually more widely traded than longer-term securities and so tend to be more liquid. short-term securities have smaller fluctuations
9、in prices than long-term securities,making them safer investments. As a result,corporations and banks actively use the money market to earn interest on surplus funds that they expect to have only temporarily. Capital market securities,such as stocks and long-term bonds,are often held by financial in
10、termediaries such as insurance companies and pension funds,which have little uncertainty about the amount of funds they will have available in the future.Num. 3:Whats the International Bond Market,Eurobonds,and Eurocurrencies?The traditional instruments in the international bond market are known as
11、foreign bonds. Foreign bonds are sold in a foreign country and are denominated in that countrys currency.The Eurobond is a bond denominated in a currency other than that of the country in which it is sold.Eurocurrencies,which are foreign currencies deposited in banks outside the home country. The mo
12、st important of the Eurocurrencies are Eurodollars.Chapter 3 What Is Money?1.Wealth :The total collection of pieces of property that serve to store value.2.Income :Income is a flow of earnings per unit of Lime.3.Medium of exchange :promotes economic efficiency by minimizing the time spent in exchang
13、ing goods and services.4.Store of value :It is a repository of purchasing power over time. A store of value is used to save purchasing power from the time income is received until the time it is spent.5.Electronic money (or e-money):money that exists only in electronic form.6.Ml :which includes the
14、most liquid assets:currency,checking account deposits,and travelers checks. Example the evolution of the Payments System.Commodity MoneyFiat MoneyChecksElectronic PaymentE-MoneyNum.2:Explain M1 and M2.The narrowest measure of money that the Fed reports is Ml,which includes the most liquid assets:currency,checking account deposits,and travelers checks.The M2 monetary aggregate adds to M l other assets that are not quite as liquid as those included in M l:assets that have c
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