Chapter 12

• Shares - a part of a company, the returns that sharholders have are dividents
• IBG - Individuals, Businesses, and Governments can hold shares in the financial markets. They can also hold savings and loans in financial institutes.
• Financial Markets - where people buy and sell assets such as stocks, bonds, property, and commodities
• Primary Market - when companies raise capital by selling new securities to investors directly.
• Secondary Market - when existing securities are traded between investors through stock exchanges or over-the-counter (OTC) trading systems.
• Individuals tend to take loans out for personal/investment reasons. Businesses tend to take loans to invest in capital and land resources. Governments take out loans when there is a budget defecit from the taxes collected.
• IBGs save in financial institutions due to the return-back interest rates
• The Reserve bank of Australia is a seperate entity to the government. It acts to manage the finances, and has the power to "print money". It does not provide any services to the general bank, and is more of a regulator to other banks in the country.
• All ordinaries index is the share market index measuring changes in the overall companies listed on the Australian securities exchange.
• The share market may be an indicator for economic conditions as it reflects the confidence of investors and firms. However, it is not a clear reflection of how the economy is performing
• primary market: companies sell securities to investors

  secondary market: investors sell securities with eachother