Functions of Financial Markets/Institutions in the Economy

1. Distribution of financial resources to the most productive units. Savings are transferred to economic units that have channels of alternative investments. (Link between buyers and sellers)
2. Allocation of savings to real investment.
3. Achieving real output in the economy by mobilizing capital for investment.
4. Enable companies to make short term and long term investments and increase liquidity of shares.
5. Provision of investment advice to individuals through financial experts.
6. Enables companies to raise short term and long term capital/funds
7. Means of pricing of securities e.g. N.S.E. index shares indicate changes in share prices.
8. Provide investment opportunities. Savers can hold financial instrument for investment made.

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