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Role of financial institutions/derivative

1. Give an example of financial institutions, and state what role they play in the securities markets. 

2. What is a derivative financial instrument and what determines its value

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1. A financial institution can be an intermediary between the savers and the users of funds. For example we can take banks as financial institutions. A bank helps savers by giving interest on the deposits it takes and then it lends the money to firms which need capital.

Securities market is the market for financial instruments. Banks play a big role in the securities market by acting as ...

Solution Summary

The solution explaions the role of financial institution in the securities markets and what is a derivative financial instrument