ELEMENTS OF A FINANCIAL SYSTEM 1. Financial Institutions - An organization, which may be either for-profit or
Question:
ELEMENTS OF A FINANCIAL SYSTEM 1. Financial Institutions - An organization, which may be either for-profit or nonprofit, that takes money from clients and places it in any of a variety of investment vehicles for the benefit of both the client and the organization. The major categories of financial institutions include central banks, retail and commercial banks, internet banks, credit unions, savings, and loans associations, investment banks, investment companies, brokerage firms, insurance companies, and mortgage companies.
2. Financial Markets - refer broadly to any marketplace where the trading of securities occurs, including the stock market, bond market, forex market, and derivatives market, among others. Financial markets are vital to the smooth operation of capitalist economies.
3. Financial Instruments - are assets that can be traded, or they can also be seen as packages of capital that may be traded. Most types of financial instruments provide efficient flow and transfer of capital all throughout the world's investors. These assets can be cash, a contractual right to deliver or receive cash or another type of financial instrument, or evidence of one's ownership of an entity.
4. Financial Services - provides financial services to people and corporations. This segment of the economy is made up of a variety of financial firms including banks, investment houses, lenders, finance companies, real estate brokers, and insurance companies. As noted above, the financial services industry is probably the most important sector of the economy, leading the world in terms of earnings and equity market capitalization.
5. Financial Practice - refers to the set of common methods or standard operating procedures you develop for carrying out accounting, financial reporting, budgeting and other activities related to business finances.
6. Financial Transactions - is an agreement between a buyer and a seller to exchange goods, services or financial instruments. REQUIRED: In the given scenario below. Determining the six elements (institution, market, instrument, services, practice and transactions) of financial system. Merto and Jay agreed to enter into a partnership agreement which will engage to a hardware business that will be called as "Merjay Hardware and Construction Supply". Because of this, they need to raise funds. They decided to get a loan to Metrobank. One of the requirements of the bank is to have a collateral to the loan. They decided to have the partnership business as a collateral of the loan. After one month of approval process, the bank approved the loan worth of one million pesos. After which, they signed a credit agreement with the bank.
II.
Assigning each word below to each element of financial system that (U) think have relation into.
China Bank Forex Trading Bonds Trading Sun Life Insurance Bonds Master Budgeting Lending Service Internal Control Practices Bond Venture Stocks Partnership Agreement Insurance agreement
1. Financial Institution= ________________________________________
2. Financial Market=___________________________________________
3. Financial Instruments=_______________________________________
4. Financial Services=__________________________________________
5. Financial Practices=__________________________________________
6. Financial Transactions=_______________________________________