"Financial markets play an important role in the allocation of scarce resources in an economy by performing important functions." In light of the given statement, state any three functions performed by financial market.

Explanation

Following are the functions of financial market: (Any three)
(i) Mobilisation of Savings and Channelising them into the Most Productive Uses: A financial market facilitates he transfer of savings from savers to investors. Thus, it helps in channelising surplus funds into the most productive uses.
Facilitating Price Discovery: Households represent the supply of funds and the busines firms represent the demand. The intersection between and supply helps in the price discovery of financial asset, which is being in a particular market.
(iii) Providing Liquidity to Financial Assets Financial market facilitates easy purchase and sale of financial into cash whenever required.
(iv) Reducing the Cost of Transitions: Financial markets provide a common platform where buyers and sellers meet. It helps is saving effort and money of the buyers and sellers at the time of trading in the market, by providing them valuable information.