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The Federal Reserve - Essay Example
Finance & Accounting
Pages 5 (1255 words)
Finance and accounting Name: Professor: Institution: Course: Date: Abstract Companies need to have a sense of financial security in order to be able to continue in business. Financial securities provide companies an opportunity to participate in the financial market thus enhancing the growth and development of the general economy…
This paper seeks to analyze the role of the financial markets in economic wealth creation in the United States as well as three financial securities which include; stock shares, bonds, and treasury bills. Analyze the role financial markets play in creating economic wealth in the U.S. Financial markets have a significant role as far as the United States economy is concerned. Most importantly they aid in the creation of wealth through various ways. In line with this a major role of financial markets is the facilitation of transfer of funds from those who have surplus to those without. This basically means that funds are channeled to borrowers from lenders through systems and frameworks in the financial markets. Lenders spend small portions of their incomes while the rest is kept for savings while borrowers wish to spend more than their incomes. This makes it possible for funds to flow from the lenders to the borrowers. Financial markets provide an avenue through which finances move from lenders to borrowers. In financial markets financial instruments otherwise regarded as financial securities are instruments that facilitate the transfer of funds. ...
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