ASSIGNMENT 1 OVERVIEW OF FINANCIAL SYSTEM

Through watching the video, I have learned some things that I’ve never knew
before. For one, I have learned that Financial Market is a subset of financial economics
which is a branch of economics that analyzes the state of resources in markets in which
decisions are made in case of uncertainties.

Furthermore, Financial System is a set of institutions like banks that permits

the exchange of funds. It is also a complex system that closely linked to financial
institutions, agents and others which enables the transfer of money between investors
and borrowers. Financial System comprises of money, financial markets, financial
instruments, financial institutions and service.

In addition, Financial Instrument gives a financial asset on one entity and

liability to other entity. These instrument can also be traded and settled. Meaning
people can buy and sell these. Examples of this are bonds and shares. Now, Financial
Market is where the Financial Instruments are traded. In here, it helps those deficit
units or those people who are looking for funds (i.e users or borrowers) accommodate
finance corporate needs and help those surplus units or those people who have extra
money (i.e investors and saver), accommodate investment needs. Finally, Financial
Institutions transfer funds of financial resources such as banks from the saver to the
borrower.