Financial Market

A financial market is a financial goods marketplace.  Buyers and vendors are interacting with each other here. They trade in economic resources such as equity, bonds, mutual funds, currencies, and derivatives. The price discovery of such economic resources is solely the demand and supply play of the market's fundamental resources. The financial market therefore functions as a bridge between those who have access to cash with those who are in deficit and need cash. Thus, flows from providers to request funds through financial market funds through the use of financial instruments. Let's now look at the various kinds of financial markets and their short role.

Functions of financial markets

1. Intermediate features: Financial markets ' intermediate functions include: resource transfer: financial markets facilitate the transfer of actual economic assets from lenders to ultimate borrowers.
2. Revenue enhancement: Financial markets enable lenders to gain interest or dividend on their surplus invisible resources, thus contributing to person and national income improvement.
3. Productive use: Financial markets enable the borrowed funds to be used productively. The improvement of revenue and gross domestic output.
4. Capital formation: Financial markets provide a channel by which fresh savings flow to support a country's capital formation.
5. Pricing: Financial markets enable the price of traded economic resources to be determined through buyers and sellers interaction. Through the system called price discovery process, they provide a sign for allocating resources in the economy based on demand and supply.
6. Sale mechanism: Financial markets provide a mechanism for an investor to sell a financial asset to provide marketability and liquidity benefits for such investments.
7. Information: The economic market participants ' operations result in the generation and consequent dissemination of data to the different market segments.To decrease economic asset transaction costs.

Financial functions 

1. Providing resources to the borrower to allow them to implement their investment plans.
2. Providing earned assets to lenders in order to allow them to gain wealth by deploying assets in debentures for manufacturing.
3. Providing market liquidity to enable fund trading.
4. Facilitation of credit creation Promoting savings Promoting investment Facilitating balanced economic growth Improving trade floors