Question

How has the understanding of financial markets evolved over the last 60 years? Reflect using the material covered in the module.

Answer 1

The understanding of financial markets have changed significantly in past various decades because of these following factors-

A. There has been an insertion of different kind of financial as well as technical tools and introduction of derivative segments into the market which has lead to high volume and transparency into the overall market.

B. Free trade and emergence of globalisation across the world has also lead to investment into international market.

C.fast communication and fast execution of trade has led to system-driven trading and excessive leverage.

D.there are strict regulatory bodies who are continuously monitoring the functioning of various listed companies into the market and they also require high level of disclosure requirements for protection of the interest of the investors associated with the share market.

E.stock markets are looked as an indicator for the overall economy which was not earlier prevalent.

F.There are continuous monitoring of various financial event by central banks as well as Central Government and they are actively reacting to control and flourish the financial markets.

G .inclusion of digitalization into financial world has led to wide transparency and high involvement of retailers across the world.