Financial Markets and Institutions

ASSIGNMENT - Developing an understanding of financial markets and institutions as drivers of the modern economy

Task 1
The role of financial intermediaries is mainly to act as a middleman between banks and funds in order to facilitate transactions.
(a) Discuss several types of financial intermediaries
(b) Critically examine the role and benefits of financial intermediaries in the UK economy.

Task 2
There are various risk factors that characterize the financial market that companies face in today's UK economy. Identify and critically evaluate the components of the market and financial risk that may negatively influence a rational investor.

Task 3
(a) Critically discuss why a well-developed international stock market is essential for the proper functioning of an economy. Support your analysis with current articles. Furthermore, critically present an understanding of the dividend valuation methods to valuing stocks using real world examples.

(b) Identify and discuss criteria of some recognized indexes that can be used to track market performance.
(c) Critically discuss the relationship between interest rate changes and bond prices.

(d) An investor owns 400 shares in Apple Inc, its stock price in 2020 and 2021 was $132.69 and $177.57 respectively. A dividend of $2.05 was paid at the end of 2020. What is the Dollar return over the period?

Task 4
A central bank's fundamental function remains economic growth and sustainability. The Russian invasion of Ukraine in 2022 and the pandemic in 2020/2021 have adversely affected the UK economy. Provide a critical analysis of various interventionist strategies that the Bank of England can implement to improve the economy's performance.