Question

The most important function of a financial market is: Select one: a. To provide information about...

The most important function of a financial market is:

Select one:

a. To provide information about shares.

b. To provide a market for shares.

c. To facilitate the flow of funds between lenders and borrowers.

d. To secure profits for brokers and agents.

e. To provide information about an issuing company's financial situation.

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Answer #1

A financial market is a market in which people trade financial securities and derivatives at low transaction costs. Some of the securities include stocks and bonds, and precious metals.

People who access the financial market are either lenders/investors or issuers/borrowers

Lenders: the entity which buys bonds issued by companies

Investors: the entity which buys shares issued by the companies

Borrowers: the entity which issues bonds to raise debt

Issuers: the entity which issues shares to raise equity

A market facilitates flow of money between all these participants.

Hence option C seems to be correct

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