Answered: b). Financial markets and its…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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b). Financial markets and its institutions are seen as the central nervous system of an economy and must be regulated at all times. Discuss the key roles played by financial markets, and outline two (2) reasons why they must be regulated. c). Explain the difference between money market and capital market and mention two (2) securities traded in each of these markets.

Definition Definition Financial market that deals in securities or assets that are short-term in nature. The money market is responsible for keeping up the liquidity of the businesses and the organizations. These securities are usually held for a period of 12 months or less and are issued by institutions that require cash or funds for their short-term cash flow requirements. The money market is regulated by the federal government.

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