金融英语课件李丽 马跃ISBN 9787810788175 PPTchapter_15.pptVIP

Chapter 15 Consumers in the Financial System Chapter 15 Consumers in the Financial System Many financial analysts have referred to the period since World War II as the age of consumer finance because individuals and families not only are the principal source of loanable funds flowing into the financial markets today, but also are one of the largest borrowing groups in the entire financial system. 1. Financial Decisions of Consumers Each of us is a consumer of goods and services virtually every day of our lives. Scarcely a single day passes when we do not enter the marketplace to purchase food, shelter, entertainment, and other essentials of modern living. As consumers, we face four basic types of financial decisions. Basic Types of Financial Decisions: Consumption and saving decisions: How much our current wealth should we spend on consumption and how much of our current income should we save for the future? Investment decisions: How should we invest the money we have saved? Financing decisions: When and how should we use other people’s money to implement our consumption and investment plans? Risk-management decisions: How and on what terms should we seek to reduce the financial uncertainties we face or when should we increase our risks? As a result of saving part of our income for use in the future, we accumulate a pool of wealth, which can be held in any number of different forms. One form is bank accounts; another might be a piece of real estate or a share in a business venture. All of these are assets. An asset is anything that has economic value. When we choose how to hold our pool of accumulated savings, it is called personal investing or asset allocation. In addition to investing in our own homes, we will often choose to invest in financial assets, such as stocks or bonds. When we borrow, we incur a liability, which is just another word for debt. A household’s wealth or net worth is measured by the value of its assets minus its li