Date: February, 08 2021

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Timbang, Rainne Vannex Module No.1 February 08, 2021 1. Based on the discussion, summarize the importance of studying financial
markets, instruments and institutions. Give 5 concrete evidences. It is important for us to study and understand financial markets,
instruments and institutions because first, for us to know how they contribute to the expansion and growth of the economy of a country. The
financial market is the market where financial securities are being traded from one business to another while financial institutions make
financial market works. With the help of financial market, instruments and institution, individuals can start to save their money whereas
companies can expand their business more using the funds that being lend by the financial institutions. With these, one country can collect
more tax which can use to provide the needs of the public, and since these three facilitates the investments of the businessmen as well as
the savings of people, GDP (gross domestic product) will increase which result to the growth of the economy. As an evidence, Federal
Reserve System, Flow of Funds, June 9, 2005 shows that financial institutions contribute to the increase of GDP of United States from 1999
to 2004 which results the growth of the U.S Economy. The GDP of U.S in current dollars in 2004 was $11,735 billion dollar. Second
importance is that, through studying the financial markets, instruments, institutions, we can be aware on how we can make investments,
acquiring stocks, save money for mutual funds, retirement plan, or insurances because in most cases, individuals can make profits by those
kinds’ activity. If we are knowledgeable enough about these, we are able to use our money in a productive and useful manner. For example,
we can be curious about the stock price of some corporation like JFC (Jollibee Food Corporation) where in their average stock price as of
February 5,2021 is Php 183.02. Not only that, we can also buy some insurance plan to SSS (Social Security System) and such for our life
insurance. Third reason is that, financial institutions are the largest employers which pays high salaries. If we are able to study financial
institutions, we can apply to the institutions that frequently pays high salaries. As an evidence, Wells Fargo and JPMorgan Chase are the
two leading banks in the United States which have 259.8 thousand full-time equivalent employees and 256,981 employees, respectively, as
of 2019. In line with this, Goldman Sachs and JPMorgan Chase are included in the top 5 financial institutions in U.S that pays high salaries
for financial analyst with an average base salary of $74,958 and $66,770, respectively. Fourth reason is how financial markets and
institutions influenced most of the companies because they both involve huge flow of funds which can affect turn in business profits and
production of goods and services. According to the conclusion of City National Small Business Report, only 39 percent of the 1,000
companies that is being asked said that their banks played somewhat or large role to the growth of the business, while 24 percent said that
it does not played role at all to their companies and 38 percent said that financial institutions and markets affect their profits and productivity
a little. Lastly, it is important to study financial market, instruments and institutions for us to know how financial markets let small savers and
borrowers to benefit from the existence of financial institutions because financial institutions can use the savings of the savers to lend
money to the borrower to start a business while the savings of the saver increases over a period of time with in a respective interest rate. As
an evidence, Bank of the Philippine Islands have this business loan named BPI Family Ka-Negosyo Loan which let the borrower borrows a
minimum of PHP 500,000 and a maximum of 60% or 70% of appraised value of collateral for one to ten years loan term. 2. How do financial
markets and institutions contribute in the stabilization of the economy during this time of pandemic? Most economies are affected during
this time of pandemic, Covid-19 outbreak brought the world into a situation where everyone experienced loss such as loss of income, jobs,
loved ones, shortage in foods, protection and the like. But the most affected in this time of pandemic are the businessmen and
entrepreneurs where in some of them experiences losses and the need of shutting down their businesses because they will incur more
losses when they choose to operate. However, during the pandemic and its recovery, the help of financial market and institutions are vastly
in need because with those, companies and businesses can start again with their operation through borrowing money to the financial
institutions and trading stocks and financial securities to other investors in financial market in order for some businesses not to stop their
operation and for others to acquire some shares and help other businesses. With the financial sectors, liquidity of business can further
increase through providing and granting them loans. Financial sectors play a very crucial role in our economy this time of pandemic
because they contribute to the stabilization of it through financing and lending individuals in order to diminish the effect of pandemic to their
families and to slowly recover from the effect that this pandemic has given to us.