MANAGEMENT

Detailed explanation-1: -Stock Market Clearinghouses The clearing division acts as the middle man, helping facilitate the smooth transfer of the stock shares and the money.

Detailed explanation-2: -The primary role of financial institutions is to provide liquidity to the economy and permit a higher level of economic activity than would otherwise be possible. According to the Brookings Institute, banks accomplish this in three main ways: offering credit, managing markets and pooling risk among consumers.

Detailed explanation-3: -Financial institutions are essential because they provide a marketplace for money and assets so that capital can be efficiently allocated to where it is most useful. For example, a bank takes in customer deposits and lends the money to borrowers.

Detailed explanation-4: -The use of financial instruments can reduce exposures to certain business risks, for example changes in exchange rates, interest rates and commodity prices, or a combination of those risks.