Money is defined as anything that is generally acceptable as a medium of exchange and in the settlement of debts, Money can also be defined as anything that is generally acceptable as a means of payment.
money, a commodity accepted by general consent as a medium of economic exchange. It is the medium in which prices and values are expressed; as currency, it circulates anonymously from person to person and country to country, thus facilitating trade, and it is the principal measure of wealth.
Define money and capital market.
Identify the types and functions of the institutions.
Explain the types and features of securities.
Explain the process of and requirements for accessing the capital market
List the benefits of the capital market.
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Demonstrate an understanding of the meaning, transaction and trading methods in the secondary market.
DEFINITION OF MONEY
Money is defined as anything that is generally accepted as a medium of exchange and in the settlement of debts. Monies can also be defined as anything that is generally accepted as a means of payment.
A medium of exchange that is centralized, generally accepted, recognized, and facilitates transactions of goods and services, is known as mony. Money is a medium of exchange for various goods and services in an economy
Define monies and capital markets. Identify the types and functions of the institutions. Explain the types and features of securities.
Explain the process of and requirements for accessing the capital market List the benefits of the capital market. Demonstrate an understanding of the meaning, transaction and trading methods in the secondary market.
FUNCTIONS OF MONEY
The basic function of monies is to enable buying to be separated from selling, thus permitting trade to take place without the so-called double coincidence of barter.
In principle, credit could perform this function, but, before extending credit, the seller would want to know about the prospects of repayment.
That requires much more information about the buyer and imposes costs of information and verification that the use of currency avoids.
A medium of exchange that is centralized, generally accepted, recognized, and facilitates transactions of goods and services, is known as money.
Money may make the world go around, as the song says. And most people in the world probably have handled monies, many of them on a daily basis. But despite its familiarity, probably few people could tell you exactly what money is, or how it works.
types of money
Bank money
Bank money consists of the book credit that banks extend to their depositors. Transactions made using checks drawn on deposits held at banks involve the use of bank monies which most financial institutions view differently
virtual money
Fiat money or currency isn’t virtual as it has to be tangible but recent innovation has seen the creation of virtual currency or virtual monies.
Virtual currency or virtual currency is a type of unregulated digital currency, which is issued and usually controlled by its developers and used and accepted among the members of a specific virtual community.
This type was the beginning of cryptocurrencies and crypto mining like bitcoin, etheron and the rest of their likes
Commodity monies
Commodity money is a good whose value serves as the value of monies. Gold coins, silver coins etc are an example of commodity money.
In most countries, commodity currency has been replaced with fiat money. In commodity monies, the what of what you want to buy or purchase is equal to the value of the commodity currency you are holding which almost looks like trade by barter
Fiat money
Fiat money is good, the value of which is less than the value it represents as monetary tender. dollar bill notes are an example of fiat mone because their value as slips of printed paper is less than their value as monies
Value Of Money
The value of a currency refers to the purchasing power or worth of a particular currency in relation to goods, services, and other assets.
The value is influenced by various factors, including economic conditions, inflation, interest rates, and the overall stability of the financial system.
Inflation plays a significant role in determining the value over time. When there is inflation, the general price level of goods and services increases, reducing the purchasing power of each unit of currency.
In contrast, when there is deflation, the general price level decreases, and the purchasing power of money increases.
Interest rates also affect the value of money. Higher interest rates can make holding money more attractive, increasing its value.
Conversely, lower interest rates can decrease the value of currencies as people seek higher returns on their investments.
Currency exchange rates also play a role in determining the value. Exchange rates fluctuate based on various economic and geopolitical factors, and they affect the relative value of one currency compared to another.
It\’s important to note that the value is subjective and can vary from person to person based on individual circumstances and needs. Additionally, different countries may have different currencies with varying values compared to each other.
