PRESENTATION TECHNIQUES The Many Roles of Financial Markets Fatma POLAT
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Dec 07, 2014
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PRESENTATION TECHNIQUES
The Many Roles of Financial Markets
Fatma POLAT
The Many Roles of Financial Markets
Has the financial markets been changed for last twenty years?
If it has changed, what types of changes could be happened in financial markets?
THE MANY ROLES OF FINANCIAL MARKETS
The economic functions of financial markets include :
The provision of choice in the timing of consumption
The management of risk The clarification of the role of
management The provision of information
THE MANY ROLES OF FINANCIAL MARKETS
1. The Provision of Choice in The Timing of Consumption
Financial markets and instruments enable individuals to choose more effectively between current and consumption
TOMORROWOR
TODAY?
THE MANY ROLES OF FINANCIAL MARKETS
2. The Management of Risk
Financial markets allow efficient risk sharing among investors . There are two types of risks:
Diversifiable
Non-diversifiable
THE MANY ROLES OF FINANCIAL MARKETS
3. The Clarification of the Role of Management
Financial markets enable the separation of ownership from day-to-day managerial control
Shareholders
Net Present Value
THE MANY ROLES OF FINANCIAL MARKETS
4. Provision of Information
By providing information concerning performance the presence of a well-functioning stock market and enables poor management
THE MANY ROLES OF FINANCIAL MARKETS
The operation of well-functioning financial markets
bring borrowers and lenders together, improve risks sharing, lead to the optimal allocation of resources, provide information to market participants, allow the separation of ownership from management and help monitor management.
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