1 / 18

Nonbank Financial Intermediaries

Nonbank Financial Intermediaries. Finance Company- make loans directly to consumer Life Insurance Mutual Funds- sells stock in itself and invests in other stocks and bonds.

lavonn
Download Presentation

Nonbank Financial Intermediaries

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Nonbank Financial Intermediaries • Finance Company- make loans directly to consumer • Life Insurance • Mutual Funds- sells stock in itself and invests in other stocks and bonds. • Pension Funds- income security to someone who has worked a certain number of years • Real Estate Investment(REIT)- loans to construction companies

  2. Investment Considerations • Risk and Return • Objective • Consistency • Complexity

  3. Bonds • Coupon- interest • Maturity- life • Par Value- dollar value • Corporate, Municipal and Government

  4. Certificate of Deposit(CD) • Loans made to financial institutions • Time sensitive • FDIC insured

  5. Money Market • Mutual fund • Not FDIC insured • Higher interest rate

  6. Treasuries • US Government borrowing money • Seen as very safe investment

  7. Individual Retirement Accounts (IRA) • Long term tax shelters used for retirement

  8. Organized Stock Exchanges • New York (NYSE) • American (AMEX) • Regional • Global • National Association of Securities Dealers Automated Quotations (NASDAQ) • Over the Counter (OTC)

  9. Dow-Jones Industrial Average (DJIA) • 30 active, reputable, large, reflective stocks on NYSE

  10. Stand + Poor’s 500 • Larger, covers AMEX, OTC, NYSE

  11. Money • Medium of Exchange • Standard of Value • Store of Value • Standard of deferred payment

  12. Money Standard • Gold Standard • Fiat Money Standard

  13. M1 • Currency, demand deposits, and traveler’s checks • Quick cash

  14. M2 • M1+savings, time deposits (CD’s) and money markets • Not as liquid

  15. M3 • M2+large-demnomination times deposits • $100,000 or more

  16. Demand for Money • Price level of goods • Income • Interest rates • Credit availability

  17. Demand for Money • Transactions motive • Daily spending • Precautionary motive • Emergency money • Speculative motive • Future

  18. Investments • Stocks • Bonds • Commodities

More Related