Which of the following is an example of a financial market?

A. A local coffeehouse where people regularly buy and sell financial instruments.

B. A bank that only accepts deposits and issues loans.

C. An electronic network used for buying and selling textbooks.

D. A central bank used for raising taxes and borrowing on behalf of the government.

Question

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4 May, 15:23

Which of the following is an example of a financial market?

A. A local coffeehouse where people regularly buy and sell financial instruments.

B. A bank that only accepts deposits and issues loans.

C. An electronic network used for buying and selling textbooks.

D. A central bank used for raising taxes and borrowing on behalf of the government.

+3

Answers (1)

Know the Answer?

Micah · Answer 1

A. A local coffeehouse where people regularly buy and sell financial instruments.

Explanation:

A local coffeehouse where people regularly buy and sell financial instruments is an example of a financial market because by definition a financial market is a place where people buy and sell financial securities and derivatives at minimal transaction costs.

Although in the scenario above it is strange that the location is a coffee shop, however, what is actually essential is the fact that the activities that defines a financial market is taking place therein.