{The image in the header represents the 2 financial market positions: bullish market a bearish market}

Bullish investors believe that a stock price will increase over time and thus tend to buy stocks eg. during a growth period.

Bearish investors believe that a stock price will decline eg.during a recession and thus tend to sell stocks.

dollar-collection-icon

  • The 3 Core Functions of the Financial Services Industry:
  1. Savers and borrowers are bought together through the investment chain, allowing risks to be managed and the provision of payment systems. The investment chain links individual savers to firms seeking funds for investment and opportunities for savers to manage their finances.
  1. Risk- Availability of Financial Derivatives, Hedging Options, Insurance: Financial derivatives refer to a contract that is a security with a price that is dependent or derived from underlying assets (Eg. stock, bonds, commodities.) Hedging is about decreasing or transferring the risks associated with investment. As with any risk/reward trade-off hedging also reduces the returns while reducing risks. Insurance is used to hedge risks and is a contract in which an individual is offered financial protection against loses from the insurance company.
  1. Systems- Access to payment systems and banking services
Advertisements