Fin 504 Topic 1 DQ 2 - What role do primary financial...

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What role do primary financial markets play in our economy? What role do secondary markets fill? Describe the relationship that exists between financial institutions and financial markets and suggest a method in which this relationship can run more smoothly. Support your rationale with at least one citation from the literature. The financial system comprises all financial markets (such as   trade stocks or bonds) , instruments (from back CDs to futures and derivatives), and institutions (such as pensions, mutual funds, or from bank to insurance companies). Financial markets are forums in which suppliers of funds and demanders of funds can transact business directly (Gitman & Zutter, 2015). Function of financial markets include: allowing transfers of funds from business or individual without investment opportunities to one who has them; improves economic efficiency. Financial markets play a vital role in the accumulation of capital and the production of goods and services.

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