Its a discussion question so you gonnnna answer and explain to question one and

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Its a discussion question so you gonnnna answer and explain to question one and two

pter 3 Discuss x My Account Chegg.com x tructure.com/courses/2392664/discussion.topics/1 4 1 20846#submit due S This is a graded discussion: 40 points possible Chapter 3 Discussion By the end of Chapter 3, you should understand: 1) financial instruments and their different types 2) financial markets and their differences 3) financisl institutions and their varieties This discussion question has several parts, Give each explaination in a complete paragraph form. You post is worth up to 30 points . C ritically comment on the postings of any two students for 10 points. When responding to the that you can add significant thought to and address that concept posts of others, pick one item your post. Each of two respons es you make are worth up to 5 points each. 1) Explain direct, indirect finance, financial instruments, and financial institutions. Why do they exist? il) Explain financial markets? When are they primary or secondary, and debt or equity markets and why? You discussion and comments on the discussion of any two students are required to be clear thorough, and detailed. Unread

Explanation / Answer

Ans : I) Direct Finance : IPO (Initial public offering) is an example of direct finance or we can say where the company is directly taking money from the market, there is no intermediary.

Indirect Finance : Govt. subsidies or exemptions to promote the industry is infirect financing. Like land at low price than market rates etc.

Financial instruments : Instruments which are used to raise the money for the company like bonds, equities or any monetary contract.

Financial institutions : Those institutions which are dealing in financial and monetary transactions like loans, deposits, investmenst, currency exchanger.

These things exist to support the economy by supporting industries in monetary terms and finally contributing to the economy. Or to carry out the exchange of money as per the regulator instructions.

II) Financial markets : It is defined as the forum or platform where the trading of securities & derivatives are carried out by the entities or individuals.

Primary or secondary is categorised , when the securities are issued (primary) on the financial market or exchanged (secondary) when securities already existed but traded on them.

Debt market is where the debt instruments like bonds are issued , while in equity market the percentage holding is being sold to the buyers. In debt market the returns are fixed for buyers , while in equity it can go North or South at every moment of the trading time activity.

The differentiation in primary or secondary and debt or equity is when markets are defined based on the status of the securities, while for debt or equity it is based on type of instrument, as debt / equity can be exchanged in primary or secondary market.

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