Financial System

Market efficiency refers to the degree to which asset prices fully reflect all available information at any given time, ensuring that securities are fairly valued based on their intrinsic worth.

The primary market and secondary market are two key components of the financial market. The primary market is where securities, such as stocks and bonds, are issued for the first time by companies, governments, or other entities to raise capital.

The Derivative Market The derivative market is a financial marketplace where derivative instruments such as futures, options, forwards, and swaps

The money markets are a component of the financial system, facilitating short-term borrowing and lending of funds, typically with maturities of one year or less.

Financial markets are broadly categorised into different type based on the nature of assets traded. We can break down a country’s financial market into an internal market and an external market.

Regulating financial activities is essential for ensuring economic stability, protecting investors, and preventing fraudulent practices.

There are three economic functions of financial intermediaries when they transform financial assets. These are, Maturity intermediation …

Financial intermediaries play a role in the efficient functioning of financial markets by bridging the gap between savers and borrowers.

Financial markets play a crucial role in the economy by facilitating the efficient allocation of resources and capital. Investors exchange financial instruments in a financial market.

Difference between Debt and Equity The main difference between debt and equity is that debt involves borrowing money with an