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Finance Class Notes

Class 1:


The barter system: trade


Exchange rate (amount exchange)


Double coincidence of wands (matching up with wants)


Money = medium of exchange


Must be divisible, must be portable, must be durable, recognisable, scarce


Fiat currency -> government issued currency

  • NOT backed up by gold


Digital money -> credit and debit cards, in-game money as well

  • Examples: Robux, koins, fishies, ect.


Decentralized -> no centralized authority/there's no one person or group of people that is specifically in charge



Class 2:


Inflation occurs in an economy when there is a total expansion of money

Once new money enters the economy, prices rise

Debasement: mixing the original material with cheaper ones

Hyperinflation: Prices skyrocket and money becomes worthless

Inflation -> secret tax

Stagflation

Inflation is an incentive to invest

Credit Score: your reward for having good credit with a low interest rate



Class 3:


Investing: Gradually build your wealth

Rewarded for taking a risk

Risk and reward is not equal though

Bonds are loans given to the government or a company and they would give you interest

Index evaluates market performance

Bull market and Bear market

Bear: calm, dropping prices

Bull: aggression (when things are doing very well)

A way a cy os valued is by looking at their market cap (price per share x #of shares out standing)

Class 1:


The barter system: trade


Exchange rate (amount exchange)


Double coincidence of wands (matching up with wants)


Money = medium of exchange


Must be divisible, must be portable, must be durable, recognisable, scarce


Fiat currency -> government issued currency

  • NOT backed up by gold


Digital money -> credit and debit cards, in-game money as well

  • Examples: Robux, koins, fishies, ect.


Decentralized -> no centralized authority/there's no one person or group of people that is specifically in charge



Class 2:


Inflation occurs in an economy when there is a total expansion of money

Once new money enters the economy, prices rise

Debasement: mixing the original material with cheaper ones

Hyperinflation: Prices skyrocket and money becomes worthless

Inflation -> secret tax

Stagflation

Inflation is an incentive to invest

Credit Score: your reward for having good credit with a low interest rate



Class 3:


Investing: Gradually build your wealth

Rewarded for taking a risk

Risk and reward is not equal though

Bonds are loans given to the government or a company and they would give you interest

Index evaluates market performance

Bull market and Bear market

Bear: calm, dropping prices

Bull: aggression (when things are doing very well)

A way a cy os valued is by looking at their market cap (price per share x #of shares out standing)