ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -loan. a network of savers, investors, and financial institutions that work together to transfer savings to investors. accounts, certificates of deposits, and government and corporate bonds.

Detailed explanation-2: -A financial system is the set of global, regional, or firm-specific institutions and practices used to facilitate the exchange of funds. Financial systems can be organized using market principles, central planning, or a hybrid of both.

Detailed explanation-3: -Lenders or savers include domestic households, businesses, governments, and foreigners with excess funds (revenues > expenditures). The financial system also helps to link risk-averse entities called hedgers to risk-loving ones known as speculators.

Detailed explanation-4: -The journey of an investor starts with savings. An investor is nothing but an evolved saver. So, if you feel you have enough money in your bank to take care of your emergencies, you’re ready to be an investor. This is because now with your emergency fund sorted, you feel comfortable stomaching more risk.