Assignment 5: Money, Foreign Exchange, Finance

 

1.    What is finance?

Finance is a branch of economics that studies all the capital changes of companies, organizations and even personal finances.

 

 

2. What is the financial system?

The Financial System is a process in which the exchange of money is seen as between savers, investors, and all kinds of people who have capital.

 

3. What are the functions of a financial system?

The financial system is in charge of capturing, managing and channeling the savings of both nationals and foreigners for investment and spending.

Provides help to public, private and governmental organizations.

 

 

4. How are the main types of financial institutions classified? Describe each one.

Banking and non-banking: banks provide transaction services, create deposits or credit.

Intermediaries vs. No intermediaries: they lend money and mobilize savings, their liabilities go to the final savers.

 

 

 

5. What are the main classes of financial instruments issued in a financial system?

are the bonds

savings account

Actions

stock funds

coins

 

 

6. What are the distinctions between various types of financial markets based on their function? Explain them.

 

Financial markets their meaning covers many things in general, each financial market depending on its utility and the range in which it is used has different functions.

For example, the financial currency market is in charge of all exchange rates and currencies.

 

 

7. What does the “flow of funds” refer to? Explain in detail.

 

It is a system that is used for each nation and that is calculated periodically.

 

8. Write a final reflection on the topic, mentioning which were the most important aspects that you learned.

 

Finance and everything that encompasses the financial market is a very extensive but quite striking subject and it is important that as a society we have that knowledge because it is a way of how the whole world is managed, capital is moved by companies and organizations and we must to be aware that also in personal finances we must apply what we have learned.