Question

Describe the four types of financial markets and provide three to five characteristics of each.

200 word minimum

Answer 1

Four types of financial markets are as follows-

1. Stock market are offering with trading of securities and it is a secondary market.

A. Stock markets are highly liquid

B. Stock markets have various kinds of financial intermediaries like brokers and depository institutions and investment banks

C. It offers with trading of securities and there is a high market participation

2. Money market are generally offering with trading of the short-term securities and they will be offering with short term credit.

A. Money markets are specialised with trading short-term debt securities

B. Highly liquid

C. instruments which are traded in money market are commercial papers and certificates of deposits and treasury bills.

3. Derivatives markets are additional element of stock markets and commodity markets.

A. derivatives market will be offering various instruments in form of futures as well as options and swaps

B. Derivative instruments will be deriving their value out of underlying securities

C. derivative instruments are used for speculation and predicting the direction of market

4. Bonds markets are offering with the long-term bonds.

A.Bond markets are generally opening with the long-term bonds and they will be funding with the long term capital.

B. Bond markets are considered more safer than the Equities for investors.

C. Corporate bonds and treasury bonds are issued in the bond market.