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Financial Market Essay

1125 Words5 Pages

As indicated by the utilitarian methodology, financial markets encourage the stream of funds with a specific end goal to finance investments by companies, governments and people. Financial institutions are the key players in the financial markets as they perform the capacity of intermediation and in this manner decide the stream of funds. Capital markets encourage the offer of long haul securities by shortfall units to surplus units. Moreover, the securities exchanged this market are alluded to as capital market securities which incorporate bonds, mortgages and stock. It has been observed that in the late 19th century the bond market witnessed a huge upsurge; however, this boom in the market was not permanent and financial market faced severe decline. It is furthermore forecasted that this boom is coming to an end. In this paper the strengths and weaknesses of the …show more content…

Funds are moved in financial markets when one gathering buys financial assets beforehand held by another gathering and in this manner permit financing and contributing by families, firms, and government offices. The role of financial markets assumes a critical role in the development of the economy. Bansal and Shaliastovich (2012) expressed that well-working financial markets, for example, the security market, stock market, and foreign exchange market, are known not key variables in delivering high economic development. Financial markets exchange funds from the individuals who have overabundance funds to the individuals who need funds. Numerous family units and organizations with abundance funds are willing to supply funds to financial markets in light of the fact that they win a return on their investment. Besides, if funds were not supplied, the financial markets would not have the capacity to exchange funds to the individuals who need

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