Financial System and Markets: Institutions, Instruments, Money Market vs Capital Market (Overview)

Financial system is the network of institutions, markets and instruments that links savers and users of funds (concept).

A financial market is a platform where financial instruments are issued and traded, enabling fund transfer and price discovery.

Financial markets provide liquidity (easy buying/selling) and help in price discovery (any one).

Money market is the market for short-term funds and short-term instruments (concept).

True. Primary market is where new securities are issued to raise fresh funds (concept).

Treasury bill (or commercial paper/certificate of deposit) (concept).

Components of a financial system:

Any three components can be written in exams.