Question

Define a financial market in our economy and describe in trading direct and indirect

Answer 1

Financial is like any market place, but is very wide in scope, where transcations related to securties, equity,bonds, etc, take place. Financial markets are small in scope ,while some are very wide like the New York Stock Exchange. Many securties, currencies, derivatives, etc are bought and sold in the day to day transcations. The prices in the financial market do not define its real price, because of the marco forces operating in the market. Any financial market of a country defines its true growth rate, and development aspect. The capital generation of any economy depends upon its financial market.

Trading in financial market can be direct as well as indirect. Direct channel is a bit more expensive, and can require more capital investment in the begninning. The investors invest by themselves their investment in the financial market. They are to select their investment area and keep an eye about all the changes.

Whereas indirect trading can be done through small amount of investment. This is done through an intermediary, like the mutual funds. The are responsible for the area of selection of the investment, and the amount of investment. The investors capital are collected and invested in vareities of security to help them earn diversified profit.