1.

Function of Financial Market:

The function performed by the financial market can be viewed in to 2 groups.

Economics function:
Financial market performs an economic function .It facilitates the transfer of real economics sources from the lenders to the borrowers. By performing an economics function, financial market helps in the development of real productive assets of the economy This is how the capital formation is made possible by enabling the users of the funds to investment in capital assets like acquisitions of the plant and machinery, other productive assets, tools and equipment.

Finance Function:
Like that an economics function, financial market also performs an important finance function. It makes funds available to the borrowers to carry out their plans and activities of business and industry they undertake. In fact these 2 functions are interrelated to each other. So the function performed by financial market can be broadly categorized into seven categories (rose..1997) a) Saving Function: Providing profitable low risk outlets for public saving, increase investment, and increase in standard of living.

b) Liquidity function: Providing conversion functions for securities whenever needed. c) Payment function; providing mechanism to facilitate payments for goods and services. d) Policy function: Providing a channel for government policy to raise living standards of people.

e) Credit Function: providing credit to support consumption investment spending. f) Wealth Function: Providing a means to restore purchasing power needed for future spending, they don't depreciates, and less risk of risk. g) Risk Function: Providing protection to investors against risk to savers. (Insurance and derivatives securities.)

2..Structure of Financial Market: