Introduction to Financial Markets

1 Introduction to Financial Markets1.1 The pecuniary organization ? fiscal institutions, markets and instruments administer by a prudential regulator. Financial schema provides stintingal and fiscal education 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 primary incumbent to understand the overall financial system that comprises, forget alia, financial markets. The main functions of a nation?s financial system are to facilitate the:transfer of funds from verbosity 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 recoverer?s contingent needs. A nation?s financial system comp rises overabundance economic wholes (lenders), famine economic units (borrowers), financial institutions, financial markets and financial assets. 1.1.1 Surplus economic unitsThese are persons or small groups (eg somebody households or handicraft firms) who have much funds lendable than they require for immediate expenditure. That is, they render savers and say-so lenders of their unornamented funds. 1.1.2 dearth economic unitsThese are individuals or groups (eg individual households or business firms) who require additional funds to figure their expenditure plans. That is, they cost potential borrowers of funds. 1.1.3 Financial institutionsThese are organisations whose philia business involves the acceptance and lending of funds (financial intermediation) and/or the homework 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 provi de the surplus economic unit with a hold on! 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 honorable essay, order it on our website: OrderCustomPaper.com

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