FİNANSAL PİYASALAR VE KURUMLAR - Deneme Sınavı - 12

The financial system refers to a system of transferring funds from those who have excess funds to those who need to obtain extra funds in an economy. At the same time, financial decisions include both the present and the future. It consists of decisions about taking some actions/positions today, and getting the results at some future date.

Financial intermediaries are organizations that collect the savings and funnel them to parties in need. Financial intermediaries are organizations that enable lenders and borrowers to find and trust each other in the financial system.

In Turkey, the most dominant financial intermediaries are commercial banks. Some of the other financial intermediaries can be exemplified as development and investment banks, insurance companies, pension investment funds, and mutual funds.

There are five key components of a financial system: ultimate lenders, ultimate borrowers, financial instruments, financial intermediaries, and legal- administrative regulations.

The key for the financial system to function efficiently with all its components is the interest rate. Interest rate is a number, expressed in percentages. It reflects the cost of borrowing for borrowers, whereas it reflects the reward of lending for lenders. In other words, it represents the price of raising capital. Market interest rates are highly influenced by the supply of and the demand for loanable funds.

The most common financial instruments of money markets are deposit accounts and short-term bonds (issued by government or firms). The most common financial instruments of capital markets are long-term bonds (issued by government or firms) and stocks.

Risk refers in general to the magnitude and likelihood of unanticipated changes that have an impact on a firm’s cash flows, value or profitability.

In order to understand the behavior of interest rates in the economy, we should know how demand and supply in the bond market and in the market for money works. For any decision-making about buying/holding a financial asset or selecting a financial asset over asset groups; investors take these 4 factors into account: (1) wealth, (2) expected return, (3) risk, and (4) liquidity.

Splitability is a term describing how much minimum amount of money is needed in order to buy a security. Securities high in splitability are more liquid than securities low in splitability.

We may broadly classify financial intermediaries in two groups as (1) depository financial institutions, and (2) non-depository financial institutions.

Main depository institutions are deposit banks. In Turkey, the dominant financial institution in the financial system is banks. Main non-depository institutions are portfolio management companies, insurance companies, unemployment insurance funds, and pension investment funds.

The correct choice is A.

The correct choice is D.

The correct choice is A.

The correct choice is C.

The correct choice is E.

The correct choice is A.

The correct choice is D.

The correct choice is C.

The correct choice is E.

The correct choice is B.