Reference no: EM132582112
Question 1) Discuss the primary role of the financial system in the economy, and how fund transfers take place.
Question 2) Briefly describe a financial intermediary.
Question 3) Describe and state the following principal types of financial intermediaries in the Australian financial market, complete answer in the following table format:
Type of financial intermediaries and example
Primary services offered within the Australian Financial Markets
Bank financial intermediaries
E.g. Commonwealth Bank of Australia (CBA)
A financial institution that accepts deposits, makes loans and provides other services to the public.
Non-bank financial intermediaries
- Building societies
- Credit unions
- Money market corporations
- Finance companies
- Insurance companies
- Superannuation funds
Investment companies
- Managed funds
- Hedge funds
- Private Equity funds
Question 4) Securities are broadly classified as debt securities (bonds) and equity securities (shares). Briefly explain how securities market provide a link between the corporation and investors.
Question 5) Equity securities are financial instruments that represent ownership claims on a business. Equity securities for corporations are called Shares and can be bought and sold in the stock market. Explain the difference the two main types of equity securities:
• Ordinary Shares
• Preference Shares.
Question 6) Debt securities are financial instruments that represent short or long term loans to corporations. Explain the difference the two main types of debt securities:
• A note
• A bond