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 |
underwriting |
The ease with which a security can be sold and converted into cash |
marketability |
The following theory states that security prices reflect all public information, but not all private information |
semistrong-form efficiency |
The process of converting financial securities with one set of characteristics into securities with another set of characteristics |
financial intermediation |
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 |