IDENTIFICATION Flashcards
are FINANCIAL MARKETS where individuals, companies, and governments COME TOGETHER TO BUY AND SELL financial securities, such as stocks, bonds, derivatives, and commodities
Capital markets
PLAY A CRUCIAL ROLE IN ALLOCATING CAPITAL EFFICIENTLY by matching investors who have excess funds with borrowers who need capital for investments or expansion.
Facilitate Efficient Allocation of Capital
serve as a SOURCE OF LONG-TERM FINANCING FOR COMPANIES. By issuing stocks or bonds, companies can raise funds for various purposes, such as research and development, acquisitions, infrastructure development, and working capital.
Provide a Platform for Companies to Raise Capital
ENABLE INDIVIDUALS TO INVEST THEIR SAVINGS in various financial instruments, such as stocks and bonds, and participate in the potential returns generated by companies or projects.
Enable Investment Opportunities for Individuals
PROVIDE LIQUIDITY TO FINANCIAL SECURITIES, allowing investors to buy and sell securities easily.
Enhance Liquidity:
SERVE AS A MECHANISM TO DETERMINE THE FAIR VALUE of financial securities through price discovery.
Price Discovery and Risk Management
PROVIDE VARIOUS DERIVATIVE INSTRUMENTS, such as options and futures, to facilitate risk transfer and hedging.
Enable Risk Transfer and Hedging
PLAY A VITAL ROLE IN STIMULATING ECONOMIC GROWTH AND DEVELOPMENT. By providing an avenue for companies to raise capital, they can invest in new technologies, expand operations, create employment opportunities
Foster Economic Growth and Development
ONE OF THE PRIMARY PURPOSES OF CAPITAL MARKETS is to facilitate the process of capital formation.
Facilitating Capital Formation
PROVIDING INVESTMENT OPPORTUNITIES for individuals and institutional investors.
Providing Investment Opportunities
SECONDARY MARKETS within the capital markets system ENHANCE THE LIQUIDITY of financial assets.
Enhancing Liquidity:
Capital markets PLAY A CRUCIAL ROLE IN PRICE DISCOVERY as the prices of securities are determined by supply and demand dynamics in these markets.
Price Discovery
Capital markets offer various financial instruments that allow businesses and investors TO MANAGE FINANCIAL RISKS.
Risk Management:
By CONNECTING SAVERS AND INVESTORS , capital markets contribute to ECONOMIC GROWTH AND DEVELOPMENT in the Philippines.
Economic Growth and Development
Capital markets are a crucial source of financing for GOVERNMENT ENTITIES.
Government Financing
CAN CONTRIBUTE TO WEALTH DISTRIBUTION AND INCLUSIVITY by allowing a broader range of individuals to participate in the financial system.
Wealth Distribution and Inclusivity
COMPANIES LISTED ON STOCK EXCHANGE are often subject to higher levels of scrutiny and transparency requirements.
Corporate Governance and Accountability
Capital markets ENCOURAGE LONG-TERM INVESTMENT by offering instruments like bonds and dividend-paying stocks.
Long-Term Investment
EFFICIENT CAPITAL MARKETS ensure that prices reflect all available information.
Market Efficiency
Investors CAN DIVERSIFY THEIR PORTFOLIOS across various asset classes and industries through capital markets.
Diversification and Risk Mitigation
Investors CAN DIVERSIFY THEIR PORTFOLIOS across various asset classes and industries through capital markets.
Diversification and Risk Mitigation
A well-developed capital market system CAN ATTRACT FOREIGN INVESTORS, bringing in additional capital and fostering international financial integration.
Foreign Investment and Global Integration
Capital markets also CONTRIBUTE TO FINANCIAL EDUCATION AND AWARENESS as people engage with investments.
Financial Education and Awareness:
An EFFECTIVE REGULATORY FRAMEWORK is crucial for the proper functioning of capital markets.
Regulatory Framework
Capital markets encourage INNOVATION IN FINANCIAL INSTRUMENTS
Innovation and Product Development
Capital markets can provide a BUFFER ECONOMIC DOWNTURNS by allowing companies to raise funds when traditional sources of financing, such as bank loans, may be limited.
Economic Resilience:
Capital markets can indirectly CONTRIBUTE TO JOB CREATION by providing businesses with the necessary funds to expand their operations.
Job Creation:
Capital markets can indirectly CONTRIBUTE TO JOB CREATION by providing businesses with the necessary funds to expand their operations.
Job Creation:
Capital markets are instrumental in FUNDING CRITICAL INFRASTRUCTURE PROJECTS, permitting both governments and private entities to issue bonds or stocks for constructing essential facilities like roads, bridges, airports, and public transportation systems
Infrastructure Development
Capital markets are EMPHASIZING ESG FACTORS as investors seek sustainable opportunities, potentially making it easier for ESG-focused companies to attract capital and promote responsible business practices
Environmental, Social, and Governance (ESG) Initiatives
ADVANCES IN TECHNOLOGY have transformed the way capital markets operate.
Technological Advancements
