Financial markets are used to regulate domestic and international economic relations. They are an integral part of life, since every person is a participant in them.
Instructions
Step 1
Classification of financial markets by the types of assets involved in the sale is one of the most common methods. In this case, assets should be understood as resources that have a certain value. Thus, financial markets can be foreign exchange, stock and commodity.
Step 2
The foreign exchange market is a system of economic relations in which the sale and purchase of foreign currency, transactions with foreign investments and payment documents are carried out. It uses various financial instruments based on the difference in exchange rates - the prices of monetary units of some states, expressed in monetary units of other states.
Step 3
Stock market assets are securities (hence their other name - securities markets). The main instruments include bonds, stocks, cash funds, contracts for difference. Shares are issued by joint stock companies and determine the degree of participation of their holder in the affairs of the company and the share in profits. Bonds are debt obligations of borrowers to creditors, according to which they guarantee the payment of a certain amount at the end of a specified period. This amount is expressed as a floating or fixed percentage of the value of the bonds.
Step 4
Securities can be either corporate (owned by commercial organizations) and represent stocks and bonds, or government (bonds). Cash funds or mutual funds (UIFs) purchase financial assets and are subject to management company policy. The value of these funds is divided into shares that can be bought and sold.
Step 5
Precious metals, oil, sugar, grains and other products are all part of the assets of the commodity market. The price movement of certain categories of goods is directly affected by the global economic situation in general and in different countries in particular.
