ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Markets in which funds are transferred from those who have excess funds available to those who have a shortage of available funds are called financial markets. A financial market is a broad term describing any marketplace where trading of securities including equities, bonds, currencies, and derivatives occur.

Detailed explanation-2: -Financial markets create securities products that provide a return for those who have excess funds (Investors/lenders) and make these funds available to those who need additional money (borrowers). The stock market is just one type of financial market.

Detailed explanation-3: -Financial markets transfer the money or capital from those who have surplus money to those who are in need of investment.

Detailed explanation-4: -financial market participants who provide funds are called. surplus units. the main provider(s) of funds to the US Treasury is (are): households and businesses.

Detailed explanation-5: -In addition to making it possible to raise capital, financial markets allow participants to transfer risk (generally through derivatives) and promote commerce.