Role of Financial Markets

• Facilitating Saving


  Providing an opportunity for individuals and firms to save money

  Saving money in a bank account or in a pension fund
• Facilitate Lending 


  To lend money to businesses and individuals who need more cash

  Personal loans, businesses, or mortgages
• Facilitate Exchange


  To provide an opportunity for individuals and firms to exchange, making it easier for individuals and firms to trade for goods and services
• Provide a Market for Equity


  To provide a market in which equity can be bought and sold

  Selling percentage of a company to investors who are hoping to have a share in profits made
• Provide Forward Markets


  Markets in which forward markets can be drawn up and put in place

  Forward Contract- special contracts that guarantee that a trade happens at a later date and at a certain price