Question

In financial markets, firms and governments in search of funds to pay for their daily operations would be the:___________.

Answer 1

Answer:

Borrowers

Explanation:

Financial markets provide the platform for trading of financial assets (instruments) . In the financial markets, through the activities of a combination of participants , funds from the surplus sector (investors) are channeled to the deficit sector (borrowers).

The surplus sector comprises of persons, government, firms e.t.c who have more funds than they need to spend right away. Conversely, the deficit sector represents parties (firms, individuals, government) who are have shortage of funds for whatever purpose-e.g consumption, business expansion, funding of daily operations  e.t.c . In short, they are in search of funds for different purposes.

Financial instruments : These are contracts that confer rights on their holders (investors/lenders) to claim the income generate by the assets owned by the borrowers.