Types of Financial Markets (HSC SSCE Economics): Flashcards
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Practise the cards
10 cards from this deck
Primary financial markets
Primary financial markets
Where new securities are created & sold for 1st time
Money flow in primary markets
Money flow in primary markets
Directly from investors to the issuing company
Secondary financial markets
Secondary financial markets
Trading of existing securities between investors
Company funding from secondary market trades
Company funding from secondary market trades
None - money flows between investors only
Securities
Securities
Financial instruments providing claims over assets/income
ASX
ASX
Australian Securities Exchange - Australia's major share market
Four main types of financial markets
Four main types of financial markets
Share/equity, debt, derivatives, foreign exchange
Derivatives
Derivatives
Assets whose value is based on other underlying assets
Financial intermediaries
Financial intermediaries
Institutions linking savers with funds to borrowers
Why secondary markets matter
Why secondary markets matter
Provide liquidity - investors can sell securities when needed