Financial Markets Flashcards
(6 cards)
1
Q
Define Financial Market
A
Where buyers and sellers can trade financial assets
2
Q
What is the role of the financial market?
A
Bring lenders (who have spare money) with borrowers (needs cash).
3
Q
What are lenders?
A
Investors or savers who want returns on their money.
4
Q
What are borrowers?
A
Individuals, firms and governments who are willing to pay interest.
5
Q
Examples of financial markets
A
- Bond markets - lenders go to debt management and buy bonds to sell to the government
- Stock market - buy shares
- Intermediaries
6
Q
Examples of Intermediaries
A
- Commercial banks - primary objective is to keep savings from investors, make a return and lend out loans to firms, make interest
- Investment banks
- Pension banks
- Hedge funds
- Mutual funds
