Page 15 - CAPE Financial Services Syllabus Macmillan_Neat

UNIT 1
MODULE 1: INTRODUCTION TO FINANCIAL PRODUCTS AND SERVICES (cont’d)

SPECIFIC OBJECTIVES CONTENT
Students should be able to:
(b) Functions of money:
13. explain the factors that influence
asset demand; (i) medium of exchange;

14. *discuss how interest rates are (ii) unit of account; and,
determined using demand and
supply analysis; (iii) store of value.

(c) Evolution of the payment system:

(i) commodity money;
(ii) fait money;
(iii) cheques;
(iv) electronic payment; and,

(v) E-money.

(d) How money is measured using
monetary aggregates:
(i) M1 (narrow money); and,
(ii) M2 (broad money).

Factors that influence the demand for an asset
(Theory of portfolio choice):
(a) wealth;
(b) expected return;
(c) risk; and,
(d) liquidity
Use graphs to demonstrate how interest rates
are determined:
(a) Demand and Supply Analysis.
(b) Changes in equilibrium interest rates.
(c) Supply and demand for money based

on liquidity preference framework.

CXC A38/U2/16 10