BELL WORK

• What is the meaning of the cartoon?

V U N G U Y E N

FINANCIAL INTERMEDIARIES

INVESTMENTS

• Redirecting your resources to create benefits in the future.

http://www.youtube.com/watch?v=pYjTPLuNiok

http://www.youtube.com/watch?v=OjJRwbkotQM

FINANCIAL INTERMEDIARY

An institution that acts as an agent or broker by accepting money from people who wish to save money and giving it to those who want to borrow money.

DEPOSITORY INSTITUTIONS

• Commercial banks.• Savings and loans.• Credit unions.

COMMERCIAL BANKS

WHAT BANKS CAN OFFER

• Savings (Checkings or savings account).• Loans (Lending

money to borrowers).• Mortgages (Loan for

the purchase of real estate).• Credit Cards (Allow

people to buy goods with a promise to pay later).

SAVINGS AND LOANS

CREDIT UNIONS

• Specialize in mortgages and car loans.

• Serve members of a credit union only not general public.

• Not-for-profit organizations.

NON-DEPOSITORY FINANCIAL INSTITUTIONS

• Finance companies.• Life Insurance

Companies.• Pension Funds.• Retirement

Accounts.• Financial Markets.

FINANCIAL COMPANIES

• Provide loans to households and businesses.

• Does not accept deposits from public.

• Use money from stockholders.

LIFE INSURANCE COMPANIES

PENSION FUNDS

• Accumulation of money from employees and/or employers.

RETIREMENT ACCOUNTS

• Not pensions.• 401k.• Individual

Retirement Accounts (IRAs).

• Keogh Plans

DIVERSIFICATION

• Spreading out investments to reduce risk

DIVERSIFICATION

• To spread investment into a variety of assets.

BELL WORK

What is the meaning of the cartoon?

FINANCIAL MARKETS

• Stocks• Treasury Bills and

Notes • Bonds

STOCKS

• A way for corporations to make large amounts of money to reinvest in the business.

http://www.youtube.com/watch?v=50yJHK_g_Ts

CAPITAL GAIN AND LOSS

• Gain- the difference between the higher selling price from the purchasing price• Loss-Selling at a lower price than the purchasing

price

STOCKBROKERAGES

• Stock brokers can buy or sell, advise customers what to buy or sell, or have complete authority over investments.• Shares

STOCK EXCHANGES

• Markets for buying and selling stock.• Examples: New York Stock Exchange and Nasdaq

BULL AND BEAR MARKET

• Bull Market- When stock market rises steadily over a period of time

• Bear Market- When stock market falls for a period of time

TREASURY BILLS AND NOTES

• A way for government to borrow money.• T-bills or T-notes

http://www.youtube.com/watch?v=cHnGK79_K7U

BONDS

• Issued by governments or corporations to borrow money for long periods.• Different ratings (AAA, AA, A).• Can be sold before maturity.

http://www.treasurydirect.gov/kids/art/tv/tv_16.htm

MUTUAL FUND COMPANIES

• Financial institutions that pool together funs from large number of people.• These funds are

used to invest in financial assets, bonds, real estate, and stocks.

CERTIFICATE OF DEPOSITS

• Issued by banks

http://www.youtube.com/watch?v=R-HKj8Yn06k

FINANCIAL RISK

• Credit risk• Liquidity risk• Inflation risk• Time risk

SMARTSTOCKS.COM

• When you are advised to do so, get a computer from the mobile computer lab and go on smartstocks.com. • You will buy, sell, or trade stocks and document your

progress.

http://www.learn360.com/ShowVideo.aspx?SearchText=financial+markets&lid=4926753&ID=930127