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9 Cards in this Set
- Front
- Back
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Functions of a commercial bank (households)
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-Safe place to store money => Saving for the future
-Loans/borrowing (incl. mortgages) [-Debit cards/cheques, etc. => Increased liquidity] [-Transfer services] |
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Functions of a commercial bank (businesses)
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-As for households
-They can take out loans to buy CAPITAL & expand the business |
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2 types of account
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-Current account (+liquidity -interest) (debit cards)
-Long-term savings (-liquidity +interest) |
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Other functions of a commercial bank
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-Bureau de change
-Credit cards -Insurance -Pension plans |
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Central bank
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-Bank of government (bonds)
-Bank of country (Issue money & store reserves of gold, silver, and foreign currencies) -Bank of commercial banks (supervises financial/banking system) -Sets rate of interest in economy (rate at which they lend to commercial banks) (BASE RATE) -Uses MONETARY POLICY |
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Stock exchange
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-Where shares in PLCs are traded
-A place where you can buy and sell shares of a company |
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Shareholders buy shares in the hope that...
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...the company will be successful and distribute profits in the form of dividends
...the company's shares will rise in value and one might sell them for profit |
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Dividend
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-A share of the company's profit
-Dividend=money given/number of shares |
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During the annual general meeting, PLCs MUST:
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-Appoint a new board of directors
-Approve the annual accounts (independent auditor & published) -Resolve other issues which board or shareholders bring up |
