Question

3. What are eight “stylized facts” about the structure of the financial system what is adverse SuiCOS orco colection 1

Answer 1

Stylized facts about Struetene of financial system- Cé) Money Market : These are the short-teom investment Obteons uplo 365 days or I year. These arte heighly leque'd ånd volatile. Examples - T-bile, commercial paper, Certificate of depose'ts etc. co) cabe'tal market : Capital Market instruments are long term envestment starting from 5 yearts to 7 years. It will brore'de Steady returns to the clients Examples - Bond, deben teres, Shares (iii) fund based service : It deals with Faer'letaling Fenercial serrices to the in restors based on categories of fund. Leke: Master feeder fend, funds of fund, hedge funds. cers Fee based system : It generated performance fees, administrative fees for heage Fiend shrestment. Investment manager will control the portfolio Listing of securities. (V) Deseratires market : Derivative instruments like -uture, option, forward and swaps are used to mitigate risk. In case of Futures contract, Stock exchange will cleare all the transactions Settlement. fres Forex trading : High trading in foreren currenu'es will stabilize the net earnings and debt oblegations can be meet in time. vet) Spot Market i It is the market wheree buying and Selling of Stock , commoditeles happens Which generated liquid cash. so that Leverage and liquidity will maintained in the market.

ferr) én termediarees ; It conse's ts Of Central bank, commercial banks, brokerage service which provides term loans to customeres. They are deals with leasing, insurance Serieces and ad resory services: the major stylized facts about Hence, these are fehan crial system,