Series 79: Functions Of Financial Markets

Functions of Financial Markets

While there are many types of financial markets, they perform the same essential functions:

• • Raising capital. Financial markets match entities and individuals that need capital—to grow a business, to build a factory, or to buy an asset, for example—with entities and individuals that have capital to invest.
• • Valuing assets and enabling trading. In pure financial terms, an asset, whether it’s an ounce of gold, a share of stock, or an entire company, is worth only as much as a bu