|A financial system’s primary concern is funneling money from
||lender-savers to borrower-spenders
|Is a process by which investment bankers purchase new securities directly from the issuing company and resell them to the investors
|The ease with which a security can be sold and converted into cash
|The following theory states that security prices reflect all public information, but not all private information
|The process of converting financial securities with one set of characteristics into securities with another set of characteristics
|If you are a borrower, which would you prefer to occur during the life of your loan?
||a level of inflation that is higher than that anticipated at the outset of the loan
|If the supply of loanable funds decreases relative to the demand for those funds, then we would expect…?
||interest rates to increase
|The term money market is used because…?
||the instruments traded in this market are close substitutes for cash
|The nominal rate of interest is made up of…?
||both the real rate of interest and compensation for inflation