1.

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1. Borrowing and Lending
In borrowing and lending, the process involves the distribution of funds by the financial market
to those people or organizations that experience a depletion on their funds. They get the funds
from those individuals and institutions who have gained and recouped excess budgets.

2. Price Determination
Here, the values of financial securities are discerned by the financial markets. It is also known
that in specifying the prices for the recently allocated assets, secondary market like investors
plays a significant function in it.

3. Continuation and Provision of Information

It is important to know and have a lot of information about the accounts in the financial market.
They gather and give abundant input or data to stimulate the exchange. Hence, having a huge
portion of inadequate information can distinguish the trade of funds.

4. Risk Sharing
Here, the risk sharing from debtors to creditors who utilizes the collected funds to finance can
encourage the exchange in the financial markets. It would also help to curtail the probability and
effect of skepticism.

5. Liquidity
Liquidity is the term where we can obtain the funds every time we demand to have it. Moreover,
the holders of assets can purchase and resell some securities through the financial markets.
Due to this, it would help the liquidity of such financial devices to expand growth.

6. Efficiency
The efficiency is developed when it is inconceivable to obtain unusually increased recoveries in
every provided degree of risk. In economic or financial views, efficiency can rise when the
financial markets would stimulate the financial commerce.

2.) In my opinion, the government should take quick action first by informing the people
about the current news with regards to COVID 19. They should also ensure the citizens
and financial markets that everything will be alright and that they would provide
necessary measures to make sure that it would lessen the effects of the decline. It is
very important to ease the financial markets because panicking would not help to settle
the losses they have. In addition, the government should offer some important measures
to those businesses that are greatly affected by the virus especially those that have a
connection or investors in China industries. Lastly, they should also impose extra aids
with regards to public health measures to protect and avoid panic to every individual.