the financial market

Question 1

what is the fundamental purpose of the financial market?

Answer 1

the fundamental purpose of the financial market is to channel funds from those who have surplus funds and those who wish to spend less than their income to those who have a shortage of funds and those who wish to spend more than their income

Question 2

what can the process of channeling funds take place through?

Answer 2

the process of channeling funds can take place through a financial intermediary or directly through the financial market

Question 3

what are the three types of financial markets?

Answer 3

the three financial markets are:

• the money market
• the capital market
• the foreign exchange (FX) market

Question 4

what is the money market?

Answer 4

the money market is a market for short-term finance for households and businesses

Question 5

who is the money market for?

Answer 5

the money market is for households and businesses

Question 6

why type of finance does the money market offer?

Answer 6

the money market offers short-term finance

Question 7

how long is money normally borrowed and lent for on the money market?

Answer 7

money is normally borrowed and lent for up to 12 months