Financial System
In the world of finance their are two kind of person. One who are saver other are spender. for example A is the saver he save the money and B his friend have a idea to start own business but he does not have the money to start he approach A to give some money to B so that B can spend it to start a business. Here A is the saver and B is the spender.
Here is some thing risk and return concept is come. If A refused to invest into business of B it would be next apple, Google, Facebook ect. If A invest into the business what is probability that business run effectively. Here is the concept of Financial Intermediaries come. Financial Intermediaries are those who play a critical role between the saver and spender. They provide a bridge between the saver and spenders. For example Bank. most of the people want to save their money into bank rather then invest into risky investment. Then after further bank can invest into business that give bank a better return according to their financial position bank can invest into the business. Just like bank their are so many company ie. mutual fund, Insurance company.
Here we can Under the concept of where the money come from into the market..
