financial markets

• What is the title of the diagram?

  The Global Financial System

  
• What are the main components of the global financial system?

  • Government Treasuries
  • Central Banks
  • Supervisory Authorities
  • Accounting Standard Bodies
  • Currencies
  • International Financial Institutions
  • Exchange Rates
  • Investment Banks
  • Commercial Banks
  • Financial Markets
  • Sovereign Funds
  • Rating Agencies
  • Multinational Enterprises (MCE)
  • Institutional Investors

  
• What are financial markets?

  Platforms for trading financial assets
• What is the primary function of financial markets regarding liquidity?

  They allow easy buying and selling
• How do financial markets facilitate price discovery?

  Through market forces of supply and demand
• What is the role of financial markets in capital allocation?

  They direct funds to productive sectors
• What do money markets primarily deal with?

  Short-term debt instruments
• What do capital markets primarily involve?

  Long-term debt and equity instruments
• What is one function of financial institutions?

  Intermediation between savers and borrowers
• How do financial institutions manage risk?

  By distributing risk among policyholders
• What service do credit card companies provide?

  Payment services for transactions
• What is the role of investment firms?

  To provide financial management services
• What do mutual funds do?

  Manage and invest assets for clients
• What is the primary role of central banks?

  To regulate the financial system
• How do financial markets and institutions differ in their functions?

  Markets trade assets; institutions provide services
• What is the importance of capital allocation in the economy?

  It directs savings to productive sectors
• How do financial markets contribute to liquidity?

  By enabling easy buying and selling of assets
• What is the role of price discovery in financial markets?

  To determine prices of financial assets
• How do banks and insurance companies manage risk?

  By mitigating and transferring risks
• What do financial institutions provide to improve financial health?

  Expert advice and financial services
• If a company wants to raise capital through public investment, which market should it use?

  Capital market
• What is the primary function of liquidity in financial markets?

  To facilitate efficient transactions