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    Benefits from capital market activity besides intermediation

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    Our capital markets were created to bring lenders and borrowers of capital (funds) together in ways that are effective and efficient, a process known as financial intermediation. Besides intermediation, cite and discuss two additional benefits that accrue to society from capital market activities. What are two disadvantages associated with our capital markets?

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    Our capital markets were created to bring lenders and borrowers of capital (funds) together in ways that are effective and efficient, a process known as financial intermediation. Besides intermediation, cite and discuss two additional benefits that accrue to society from capital market activities. What are two disadvantages associated with our capital markets?

    Capital market consists of

    a. Bond market which helps the financing through issuance of bond and its subsequent trading.
    b. Stock market which helps the financing through issuance of common stock and its subsequent trading.

    Capital market means the market of securities. Here, ...

    Solution Summary

    The benefits from capital market activity besides intermediates are examined.

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