3.3FinancialMarketsOFinancial Markets are the places wherefinancial instruments are bought and sold.3-11
3-11 3.3 Financial Markets Financial Markets are the places where financial instruments are bought and sold
2. Function of FinancialCC8Markets1.Allowstransfers offundsfrompersonorbusinesswithoutinvestmentINDIRECTFINANCEopportunities to one who hasthemFinancial2.ImpuoveseconomicFUNDSIntermediariesefficiencyFUNDSLender-SaversBorrower-Spenders1.Households1.BusinessfirmsFinancial2.Business firms2.GovernmentFUNDSFUNDSMarkets3.Government3.Households4.Foreigners4.ForeignersDIRECTFINANCE3-12
3-12 2. Function of Financial Markets 1. Allows transfers of funds from person or business without investment opportunities to one who has them 2. Improves economic efficiency
FinancialMarketsORole of Financial MarketsOffer liguidity to borrowers and saversPool and communicate InformationAllowrisk sharing3-13
3-13 Financial Markets Role of Financial Markets. • Offer liquidity to borrowers and savers. • Pool and communicate Information. • Allow risk sharing