Bringing together buyers and sellers at low cost

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1. Functions of financial market include: bringing together buyers and sellers at low cost, providing adequate liquidity, settling and updating prices of financial assets and reducing information cost associated with investing . With aid of examples , discuss each functions in details.

2. A savings account is advertised as paying 2.40% compounded annually.

If inflation turns out to be 3.0% over the next 12 months, what would be the real rate of return on this account for the year? Express your answer to 2 decimal places.

Reference no: EM132006656

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