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Financial Markets: Three
Financial Markets: Three
Financial Markets
Financial market definition: Financial Market is a very complex market in the world. Although
most of the investor does not understand the market, they have money and want to invest their
money in the stock market. On top of that, the financial market more important parts of brokers
who conducted the transaction. The financial market has a physical & virtual platform. The
buyer and seller meet something (come to traction) exchange as Products, service, money. The
financial market assets are stock and bonds that can be bought or sold. A debt security, however,
a maturity date, at which period the surplus units can free the securities to get principal from the
deficit unit that issued them. Equity Securities, However, when some companies need money or
it can increase company wealth and hire ownership for the company. Financial markets facilitate
the flow of funds and investing by firms, householders, and government agencies. Although not
only buyer and seller, it can have market supplier, broker, feasibility. Livestock Market: all
products and services, not the same categories (different goods) called products segment.
Financial Market looks like a Livestock Market, all products and services not the same
2) Livestock Market: Consumption products that mean when I buy the goods then I never
stronger in this country. The secondary market important is liquidity purposes. For
Example, when I buy some gold from gold mining and then I sell its market also the gold
exchange hand to hand and its lifetime goods and always circle on the market its call the
secondary market. It goes to the secondary market as end up to end-users. Any exchange
is a secondary market as Dhaka Stock Exchange, Chittagong stock exchange. Any assets
much need to liquidity if it's not, then it doesn't have any value. On top of that, if a
country has no secondary market, then people do not interest in buying particular goods.
The investor always wants their assets can as soon as possible convert cash when the
investor intervenes the market. Investment assets such as land, gold, diamond, etc. in a
rural area, the secondary market has two categories of consumers as male & female. The
male consumer interest in land and the female consumer buy gold (active secondary
Market). If securities illiquid, that's mean the investors not interested in this security at a
huge discount just to attract a buyer. Treasury securities are liquid because its issue by
Non-bank financial institutions: Leasing companies offer a way for businesses and individuals
to use assets without buying them outright. Some examples of assets that are offered by leasing
companies include vehicles, construction equipment, and office equipment. According to the
U.S. Small Business Administration, 85 percent of all companies in the U.S. lease equipment,
and 89 percent of these companies intend to lease more equipment in the future.
Types of Leasing
With all leases, the company offering a lease retains ownership of the asset being borrowed.
However, there are several different types of leasing. The first is called a "direct lease." With a
direct lease, the leasing company purchases an asset and offers it to the lessee. The lessee is able
to use the asset for a prearranged amount of time, as long as the monthly lease payments are
made. The second type of leasing is called "leaseback." With this kind of lease, the lessee already
owns the asset. Instead of buying a new asset from an outside source, the leasing company
purchases the asset from the lessee and leases it back to the original owner for a monthly fee.
Leasing Terms
1. Leasing companies offer different terms to different customers. These terms include the
length of the lease, the required monthly payment, and the permitted usage of the asset.
Often, the length of the lease and the monthly payment are linked: Longer lease terms
come with lower monthly payments, while short terms require higher monthly payments.
Leasing companies often limit the type or amount of usage that is allowed. With vehicles,
for instance, it is common for leasing companies to set mileage limits. If the lessee uses
the asset in a way that violates the lease terms, additional fees may be charged
2. Other financial institutions:
1) Insurance Company is considered one of the large financial institutions in the world.
Insurance globally big company many fortune 500+ insurances are big business in the
world. Insurance companies serve individuals and organizations with insurance, which
insurance policy that minimizes financial risk such as illness, death, damage to the
property. The companies change premiums in exchange for the insurance to serve for the
particular issue. On the other hand, insurance companies invest these funds in the stock
market and bonds issued by corporations & Government. Insurance is a very fundamental
doctoring of insurance as our life is uncertain. Not only individual affect the business.
People do not like uncertainty. Our life is very uncertain, the fundamental reason we don't
know the future. Uncertainty brings a lot of risk People do not like risk; also, the risk
hedging people go to an insurance company. They do try to minimize their risk. Risk
hedging purpose for an individual corporation, institution they hedge certain risk by