Question

Explain their respective functions of TWO (2) types of financial market in the country.

Answer 1

Two types of financial market in a country would be stock markets and Bond markets.

Stock markets would be always looking for trading of the various securities and providing up to the transparency in the overall economy in dealing with the securities and it will also help in fair price discovery of the securities through twin factors of demand and supply.it would help the business organisation in raising of the money quickly and it will also help the investors in liquidating their securities quickly because it will providing them with the high liquidity.

Bond markets are focused with trading of various corporate bonds and other securities which are mostly debt instruments and they are mostly money market securities so these bonds markets are always trying to protect the interest of various stakeholders by issuance of different credit ratings and continuous gradings of bonds as well as providing up with an optimal platform to deciding with the repayment ability of the various companies and letting the investors know about the the principal risk associated with the bond payments.