Individual Assignment Week 2

Individual Assignment Week 2 - Individual Assignment Week 2...

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Individual Assignment Week 2 14.1. What are financial markets? What function do they perform? How would an economy be worse off without them? Financial markets are defined as, institutions and procedures that facilitate transactions in all types of financial claims. Financial markets are in place in order to allocate the supply of savings in the economy to the demander of those savings. Financial markets basically use the savings of the people for loans and such to other people. Without a financial market, the wealth of the economy would be less. The rate of capital would be less in an economy without financial markets. Without financial markets, organizations would not be able to purchase new machinery, or expand their business unless they have saved up enough cash to do so. 14-3. Distinguish between the money and the capital markets. The difference between the money and the capital markets is the maturity period of the securities traded within them. Money markets are institutions and procedures that facilitate transactions in short-term credit instruments, where as, capital markets facilitate transactions in a long-term financial instruments. 14-4.
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This note was uploaded on 12/19/2010 for the course FIN 370 taught by Professor Unknown during the Spring '08 term at University of Phoenix.

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Individual Assignment Week 2 - Individual Assignment Week 2...

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