High School Financial Education
Program
Florida International University
College of Business
http://business.fiu.edu/sffll
305-348-1542
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Buyers convene to negotiate with Sellers
Law of Supply and Demand rules
Goods are Allocated
Government regulates to make sure
competition is fair
Equilibrium is the price that buyers and
sellers agree on
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Direct Search Market
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Brokered Market
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Dealer Market
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Auction Market
What kind of market is this?
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Real Assets vs. Financial Assets
Real= Physical and Identifiable
◦ Machinery, Agriculture, Gold, Oil
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Financial Assets
◦ Money, Bonds, Stocks, Derivatives
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Financial Assets allow people to transfer
consumption, store value, and have a
medium of exchange.
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Financial Markets serve to match those with
an excess of funds to those that have
shortage
Many intermediaries are involved in the
process
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Investment Banks
Mutual Funds
Pension Funds
Commercial Banks
Government
Savers
Financial
Intermediary
Borrowers
Capital Markets
Companies
Households
Banks
Hedge Funds
Mutual Funds
Government
Pension Funds
Government
Companies
Households