Theme 4: Role of financial markets Flashcards
1
Q
What is the role of financial markets?
A
- To facilitate saving
- To facilitate lending
- To facilitate exchange
- To provide a market for equities
- To provide forward markets.
2
Q
What is equity?
A
When a firm sells a percentage of their company to investors in the form of shares. The investors can then receive a percentage of the profits
3
Q
What are forward contracts?
A
Fix the price and data of a future transaction now so that you know exactly how much you will pay.
