Introduction to Financial Markets

1 Introduction to Financial Markets1.1 The pecuniary organization ? pecuniary institutions, markets and instruments administer by a prudential regulator. Financial dodge provides stintingal and fiscal schooling to the markets. An efficient FS absorbs and reflects new information into the toll of financial instruments. To understand the nature of financial markets it is premier incumbent to understand the overall financial system that comprises, sink alia, financial markets. The main functions of a nation?s financial system are to facilitate the:transfer of funds from unornamentedage to famine economic wholes, in primary financial markets, by the foundation of new financial assetstrade of existing financial assets in supplementary financial marketsfacilitate portfolio structuring ? Combination of assets and liabilities each comprising of return, risk, liquidity and clock of hard cash flows that best suit each deliverer?s contingent needs. A nation?s financial sy stem comprises overabundance economic wholes (lenders), deficit economic units (borrowers), financial institutions, financial markets and financial assets. 1.1.1 Surplus economic unitsThese are persons or small groups (eg item-by-item households or handicraft firms) who have more(prenominal) funds lendable than they require for immediate expenditure. That is, they render savers and voltage lenders of their surplus funds. 1.1.2 dearth economic unitsThese are individuals or groups (eg individual households or business firms) who require additional funds to satisfy their expenditure plans.

That is, they translate potential borrowers of funds. 1.1! .3 Financial institutionsThese are organisations whose spirit business involves the acceptance and lending of funds (financial intermediation) and/or the furnish of financial operate to other economic units. 1.1.4 Financial assetsFinancial assets represent a aver or right that a surplus economic unit holds over a deficit economic unit. They provide the surplus economic unit with a repositing of value or future consumption or investment. To the deficit economic unit financial assets they have issued represent a liability or obligation. Whenever, funds... If you want to get a copious essay, order it on our website: OrderCustomPaper.com

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