Financial Markets Quiz

Overview of Financial Markets

• A financial market is a market in which financial securities are traded at low transaction costs.
• The term "market" is used for exchanges that facilitate the trade in financial securities.
• Trading of currencies and bonds is largely on a bilateral basis, although some bonds trade on a stock exchange.
• Financial markets refer to the markets that are used to raise finances.
• Capital markets allow corporations to gain long-term funding to support expansion.
• Without financial markets, borrowers would have difficulty finding lenders themselves.
• Governments borrow by issuing bonds, and municipalities and local authorities may borrow in their own name.
• Derivative products are financial products that are used to control risk or exploit risk.
• Technical analysis is the basis of attempting to predict future changes in the stock market.
• The scale of changes in price over some unit of time is called the volatility.
• The primary market is where the newly started company issued shares to the public for the first time through IPO.
• Secondary market is the market where the second hand securities are sold.