ROLE OF FINANCIAL

INSTITUTION
ACCEPTING PROVIDING LOANS DISCOUNTING AND
DEPOSITS NEGOTIATING
PROMISSORY NOTE

BUYING AND ISSUING SHARE PARTICIPATES IN

SELLING OF FOREIGN CERTIFICATES FINANCIAL MARKETS
EXCHANGE AS BOTH SUPPLIER
AND USER OF FUNDS
 Financial market
meeting
lenders, borrowers or
place to lend
owners of public
or invest
global network of companies worldwide
individuals and
where buyers financial
and sellers trade institutions
 financial markets

Secondary Market
Primary Market investors and
first time to traders buy and sell
sell stocks stocks to each
• Initial public other. The
offering (IPO) company does not
• Private
Stock Market derivatives market
trades shares of financial instruments
financial markets
ownership of derive their value from
public companies an underlying asset,
index, or interest rate.

bond market commodities market traders

offers opportunities and investors buy and sell
secure money to natural/raw resources or
finance a project commodities
 DEBT VS. EQUITY MARKET
Debt Market Equity Market
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 CASH MARKET VS FUTURES
MARKET
Cash Market Futures Market
ut the topic here. nts or the settlement or
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e t ra d e d delivery of security or
c ommod i t i e s a r
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 EXCHANGE-TRADED MARKET VS
OVER-THE-COUNTER MARKET
ra d e d m a rk e t Over-the-counter market
E xc ha n ge t
the topic here.
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m
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a r k e t t h a t this market is
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works on p r e -e s t decentralized, allowing
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 FUNCTIONS OF THE
1
MARKETS
2 3

Puts savings opens for

funding opportunities Determines
into more the price of securities
productive use (ex. loans)

4 5

. Makes Lowers the

financial cost of transactions
assets liquid
ROLE OF FINANCIAL Help firms and
MARKETS governments raise cash
by selling securities

Allow Channel (provide funds to

investors with from those who can
excess funds savers to make the best use
to invest and borrowers of them)
earn a return
Trade existing securities,
Help allocate cash Help
assures investors that
to where it is most lower the they can quickly sell their
productive cost of securities if the need
exchange arises