Allow People Money: The The

LAURENTE, PAUL MARTIN D.
CBET-01-401A
1. The crucial role that banks and other financial institution play.
 They play an important role in the financial systems because they reduce
transaction costs, allow sharing, and solve problems created by adverse
relation and moral hazard. They also allow people build an enterprise by
offering a loan. And they hold the money of their clients to store the
money’s value for the future’s fluctuating rate. The money is the oil of that
keeps the machine runs and the banks and other financial institutions are
the machine that circulates the money on it.
2. The significance of money in the economy of a country.

 The Money plays the most important role in a country’s economy. It is
serves as a medium of exchange and a common measure of value,
money has removed the difficulties of the barter system and promoted
trade in the economy. Money promotes the division of labor and
productivity in the modern economies that gives a large impact on the
growth of the economy. Money increases in savings that lead to an
increase in investment which determines the economic growth of a
country. Without money, the industry and trade that form the basis of
modern economies would grind to a halt ad the flow of wealth would
cease.
3. Give two examples of derivatives and explain each.

 Future Contract
- A futures contract is a contract between two parties where both
parties agree to buy and sell a particular asset of a specific quantity and
at a predetermined price, at a specified date in the future. You can
choose either to be a trader who buys a future contract and takes a long
position or a trader who sells futures and takes a short position. Future
contracts are purchased either as an investment or as a hedge against
the risks of future price changes.
 Options
-Options are a form of derivatives, which gives holders the right, but
not the obligation to buy or sell an underlying asset at a pre-determined
price, somewhere in the future. The most important advantage is that an
option is not binding, in the way it does not obligate one to buy a
commodity. It gives you the right to buy it and so when the price of the
option is higher than the current market price you can just let the option
expire and buy at the spot price.
LAURENTE, PAUL MARTIN D.
CBET-01-401A
The crucial role that banks and other financial institutions play.
They play an important role in the financial systems because they reduce transaction
costs, allow sharing, and solve problems created by adverse relation and moral hazard.
They also allow people to build an enterprise by offering a loan. And they hold the
money of their clients to store the money's value for the future's fluctuating rate. The
money is the oil that keeps the machine runs and the banks and other financial
institutions are the machine that circulates the money on it.
The significance of money in the economy of a country.
Money plays the most important role in a country's economy. It serves as a medium of
exchange and a common measure of value, money has removed the difficulties of the
barter system and promoted trade in the economy. Money promotes the division of
labor and productivity in the modern economies that gives a large impact on the growth
of the economy. Money increases in savings that lead to an increase in investment
which determines the economic growth of a country. Without money, the industry and
trade that form the basis of modern economies would grind to a halt ad the flow of
wealth would cease.
Give two examples of derivatives and explain each.
Future Contract
- A futures contract is a contract between two parties where both parties agree to buy
and sell a particular asset of a specific quantity and at a predetermined price, at a
specified date in the future. You can choose either to be a trader who buys a futures
contract and takes a long position or a trader who sells futures and takes a short
position. Future contracts are purchased either as an investment or as a hedge against
the risks of future price changes.
Options
-Options are a form of derivatives, which gives holders the right, but not the obligation to
buy or sell an underlying asset at a pre-determined price, somewhere in the future. The
most important advantage is that an option is not binding, in the way it does not obligate
one to buy a commodity. It gives you the right to buy it and so when the price of the
option is higher than the current market price you can just let the option expire and buy
at the spot price.

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LAURENTE, PAUL MARTIN D.

2. The significance of money in the economy of a country.

3. Give two examples of derivatives and explain each.

The significance of money in the economy of a country.

Give two examples of derivatives and explain each.

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