Financial Markets and Institutions is a comprehensive course that introduces students to the fundamentals of finance. It explores the relationships between financial institutions and the stability of the economy. By exploring models in real-world scenarios, this course helps students develop critical thinking skills and build a strong foundation for future study.
A well-developed financial system provides a wide range of financial products that meet the needs of borrowers, lenders, and investors. In addition, the financial system is a major contributor to economic growth. Studies conducted at the industry and cross-country levels confirm that financial development positively affects economic growth.
The financial market is a marketplace where individuals and firms can buy and sell a variety of financial instruments, such as securities. These include shares, bonds, and derivatives.
In the bond market, a corporation or state issues bonds to investors, who then lend money to the firm for a fixed period of time. Investors may receive a return on their investment, or lose their money. If they decide to sell their securities, they are likely to find a buyer at the best price.
Stock markets allow companies to sell and buy their own shares. They are listed on a stock exchange. Shares are bought by traders, and then sold by investors.
Another key function of the financial market is to distribute risks. In a capital market, massive risks are transferred from workers to savers. This allows the economy to operate smoothly. Without these markets, businesses would have a difficult time allocating capital.