Question

a. Explain how the stock market acts as a financial intermediary, i.e. how it converts people’s savings into investment. b. List the four services banks provide in an economy.

Answer 1

a, A licensed stock exchange issues a stock broker license, called stock broker, to a corporate entity. This business body is directly listed as trading member by the stock exchange. There are several qualifying requirements that must be met by a corporate agency before it can acquire a broker licence. A depository is a financial intermediary that provides Demat account service. This demat account for electronic shares is a physical vapour.

Typically your "savings" are placed in the safest locations, or goods, which allow you to access your money at any time. Saving options include savings accounts, account checks, and deposit certificates. Typically, the money you invest in securities, mutual funds, and other similar investments isn't federally insured. You could lose your "principal," the amount that you've invested. Yet you have the chance to raise more money too.

b. Individual Banking -

Banks offer a variety of services to assist individuals in managing their finances:

• Checking accounts
• Savings accounts
• Debit & credit cards
• Insurance*
• Wealth management

Business Banking - Many banks provide financial services to business owners having to differentiate between professional and personal finances.

Digital Banking- The ability to manage your finances online from your computer, tablet, or smartphone is becoming more and more important to consumers.

Loans- Loans are an provided that banking service, and come in all shapes and sizes. Some common forms of loans issued by banks include: personal car, ships, motorcycle and RV loans Home equity credit lines Home loans Business loans