The functions of a financial market are :
(a) Mobilisation of savings and channeling them into the most productive uses: It is a forum which facilities the flow of capital from investors to borrowers and, thus, funds are utilised for productive purpose.
(b) Facilitating price Discovery: Price for the financial assets is determined by the equality of demand (business firms) and supply (households) forces in the financial market.
(c) Providing liquidity to functional assets: Convertibility of financial assets into cash is done easily through mechanism of the financial markets.
(d) Reducing the cost of transactions: Financial markets save a lot of time and efforts of the buyers and sellers by providing a forum through which they can meet each other to fulfill their needs.
