Introduction

Question 1

What are the elements of a financial system?

Answer 1

Financial instruments and intermediaries, markets, and regulatory bodies

Question 2

What is the main function of a financial system

Answer 2

To capture savers’ surplus and channel it toward public and private borrowers.

Question 3

What are the instruments used in a financial system?

Answer 3

Financial assets, they refer to the securities or debits emitted by economic spending units which generate a liability or debts, and are means of maintaining wealth for those who buy them

Question 4

What are the main features of financial instruments?

Answer 4

Profitability, risk, and liquidity

Question 5

What are the functions of financial intermediaries?

Answer 5

They reduce costs, the transform risk and term, they improve effiency and are vehicles for monetary policy

Question 6

What does breadth mean?

Answer 6

It refers to the number of instruments trade in a market

Question 7

What does depth of a market means?

Answer 7

The greater the number the greater the number of buy and sell orders for each instrument

Question 8

What are the ways you can classify a market?

Answer 8

Means of operation, instruments traded, level of intervention, trading phase and regulation.