Financial Institutions-HW Chapter 1-#9
Chapter 1: Questions to help you Study # 9
9) Financial wealth is the portion of wealth held by society in the form of stocks, bonds, and
other financial assets which is created by the system of financial institutions and markets.
The volume of financial wealth is huge and grows nearly every year. If we subtract total
debts owed by U.S. nonfinancial businesses, households, and governments we obtain
what is called net financial wealth. Net financial wealth’s true definition is one’s
financial assets minus one’s debts. Net financial wealth is important because it indicates
our net worth, how much one is worth through money and other assets after paying or
subtracting an individual’s financial obligations and debts.