Financial Markets

Financial environment consists of financial markets, financial institution ,and financial instruments and service.Financial market are the place where transaction  of financial instrument and service take place. financial markets exist in order to bring buyer and seller of securities and financial service together. they are the mechanism that exists in order to facilitate the exchange of financial assets, thus adding to the liquidity of financial assets financial assets include wide variety of assets such as stock,bounds ,treasury bills, commercial papers including time deposit , certificate of deposits, bankers acceptance and so on. financial markets facilitate the flow of saving generated from one sector of economy to another ,where there is the demand for funds. people and organizations that need to borrow money are brought together with those having surplus funds in the financial markets.

        In financial markets funds suppliers and fund borrowers are drought together with the help of financial intermediaries directly or indirectly . these intermediaries channel national's saving into most productive uses.lenders or suppliers of funds exchange money for other financial assets that tend to provide a better future return. the net effect of such a transaction is that they buy a claim against some one's money holding at some future data. in fact, they create loanable funds in the financial market.

           The development of financial market in any economy determines the degree of success of financial activities. because financial market add the liquidity of financial securities,invested are generally interested to buy those securities for which a market exists.