Introduction to Financial Markets

1 Introduction to Financial Markets1.1 The pecuniary organization ? fiscal institutions, markets and instruments administer by a prudential regulator. Financial scheme provides economicalal and pecuniary teaching to the markets. An efficient FS absorbs and reflects new information into the toll of pecuniary instruments. To understand the nature of monetary markets it is branch incumbent to understand the overall financial system that comprises, secrete alia, financial markets. The main functions of a nation?s financial system are to facilitate the:transfer of funds from pleonasm 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 measure of hard cash flows that best suit each savior?s contingent needs. A nation?s financial system comprises overabundance economic wholes (lenders), shortfall economic units (borrowers), financial institutions, financial markets and financial assets. 1.1.1 Surplus economic unitsThese are persons or small groups (eg single(a) 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 nimiety funds. 1.1.2 dearth economic unitsThese are individuals or groups (eg individual households or business firms) who require additional funds to join their expenditure plans. That is, they defend potential borrowers of funds. 1.1.3 Financial institutionsThese are organisations whose sum of money business involves the acceptance and lending of funds (financial intermediation) and/or the supply 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 econo mic unit. They provide the surplus economic! unit with a line of descent 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 near essay, order it on our website: OrderCustomPaper.com

If you want to get a full essay, visit our page: write my paper