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Global Financial Institutions and Market Assessment

   

Added on  2020-04-13

12 Pages2432 Words45 Views
Running head: GLOBAL FINANCIAL INSTITUTIONS AND MARKET ASSESSMENTGlobal financial institutions and market assessmentName of the universityName of the studentAuthors note

1GLOBAL FINANCIAL INSTITUTIONS AND MARKET ASSESSMENTExecutive summary:The report is prepared to discuss role of government in financial institutions and explanation ofsimulative monetary policy. It demonstrates the use of money market securities and differentbond markets. Methods of valuing the stocks have also been discussed and measurement ofexcess return above risk free rate using Sharpe index. Process of initial public offerings has beendiscussed in the report.

2GLOBAL FINANCIAL INSTITUTIONS AND MARKET ASSESSMENTTable of ContentsIntroduction:....................................................................................................................................2Answer to question 1:......................................................................................................................2Answer to question 2:......................................................................................................................3Answer to question 3:......................................................................................................................3Answer to question 4:......................................................................................................................5Answer to question 5:......................................................................................................................6Answer to question 6:......................................................................................................................7Conclusion:......................................................................................................................................8

3GLOBAL FINANCIAL INSTITUTIONS AND MARKET ASSESSMENTIntroduction:Government intervenes in the financial market through framing policies and imposingregulations. Economy is stimulated by employing simulative monetary policy by reducingunemployment rate and increasing economic growth. Money market securities are assets that areinvested for short-term period with a maturity of one year or less than a year. Corporate bondsare securities that are issued by corporations for long-term on which owners are promised to bepaid coupon payments on semiannual basis. IPO or Initial public offerings are the issuing ofshares for the first time by company when they go public.Discussion:Answer to question 1:a)Government intervenes in the financial market through framing policies and imposingregulations. Regulation and controlling of financial market is heavily influenced bygovernment intervention that helps financial institutions in providing efficient financialservices by minimizing riskiness. Aim of government to regulate financial market is topromote higher level of efficiency and protect public interest. Interest of investors andborrowers in financial market is protected by development of policies by government thathelps in lowering transaction costs. Uniformity in financial market is established byimplementation of developed policies by government (Kiley and Roberts 2017). b)Economy is stimulated by employing simulative monetary policy by reducingunemployment rate and increasing economic growth. It helps in stimulating withoutconcerning about inflation as such policy would cause an increase in inflation. Business

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