TASK 1

Student’s Name:Rafael Ricardo Ávila Pérez

Nua:901954

After watching the video, answer the following questions in complete sentences.

 

What is Finance?

It is a monetary system made up of debt funds and property of the Government, companies and individuals.

 

 

 

What is Financial System?

a system that regulates the exchange of money between savers, investors, lenders and borrowers.

 

 

 

What are the functions of a financial system?

Provides a payment system for the exchange of goods and services in the economy.

- Provides a mechanism to withdraw funds in terms of savings from households for corporate investments.

- Provides financial capital for long-term capital formation for government and business organizations.

- It makes it easier for investors and other market participants to liquidate their investment alternatives such as stocks and bonds.

- Provides the avenues to manage the risks faced by market participants.

- Addresses the short and long term needs of market participants.

- Provides the necessary financial capital to the government for public spending on social welfare activities, infrastructure development, etc.

-Provides financial services, which means that it tries to provide a certain type of service to different stakeholders to maximize their return or meet their requirements in terms of financial requirements.

-Integrate the interested parties for the purpose of the transaction and the exchange of money between them. Establish a relationship between the different stakeholders.

 

 

 

How are the main types of financial institutions categorized? Describe each one.

Regulatory: their works is to oversee the functioning and fairness of financial markets and the firms that engage in financial activity.

Intermediaries: Are those who provide a middle ground between two parties in any financial transaction. They lend money as well as mobilize savings.

Non – intermediaries: Are those institutions that do the loan business, but their resources are not directly obtained from the savers. They don’t directly interact with the savers or the investors.

 

 

 

 

Which are the main classes of financial instruments issued in a financial system? Describe

them in detail.

- Derivative instruments have values ​​determined from underlying assets as resources.

- Cash instruments are financial instruments with values ​​directly influenced by market conditions.

- Currencies are represented in the foreign market and are built through exchange agreements.

 

 

 

What are the distinctions between various types of financial markets according to their

function? Explain them.

- Capital and money market:

 it is based on the differences in the maturity periods of financial assets in these markets.

 the money markets regulate short-term credits, the capital markets handle long-term claims (maturity periods greater than 1 year).

Primary and secondary markets:

The primary markets deal with the new financial rights or the new securities.

Secondary markets do business with existing or outstanding securities.

 

 

 

What does the “flow of funds” refer to? Explain in detail. 

They are accounts that are used to protect the flow of various sectors of the economy of a country. The data obtained from the flow of funds is analyzed by the central bank and published so that all citizens of a country can have access to them.

 

Write a final reflection on the topic, mentioning what were the most important aspects you

learned.

It is very interesting, but also necessary to know about financial systems. Knowing the systems that regulate finances as well as the way in which companies, people and nations are immersed in the financial system is a very useful resource, watching the video was very educational and interesting