1, financing;

2. Price discovery;

3. Provide liquidity;

4. Risk management;

5. Reduce search cost and information cost.

Supplementary information:

Detailed analysis of five functions of financial market;

1, financing

The primary function of financial market is financing. Financial market realizes the transfer of monetary funds between the supplier and the demander through the transaction of financial assets, and promotes the formation of tangible capital.

2. Price discovery

In the financial market, the interaction between supply and demand determines the price of trading assets, and the price of trading assets provides a signal for potential market participants, guiding the allocation of funds among different financial assets to achieve a balance between supply and demand, which is the so-called price discovery process.

Step 3 provide liquidity

Financial market provides liquidity, which means it provides investors with a mechanism to sell financial assets. Investors may need to realize financial assets for various reasons after exchanging monetary funds for corresponding financial assets. An important function of financial market is to provide liquidity, that is, channels and mechanisms for realizing or redeeming financial assets.

4. Risk management

An important function of the financial market is to manage, prevent and resolve the risks contained in the real economy or financial behavior through insurance and hedging transactions. The financial market has the function of redistributing the risks arising from tangible assets between the supply and demand sides of funds.

5. Reduce search cost and information cost.

Financial market can reduce two kinds of transaction costs: search cost and information cost. Search cost includes explicit cost and implicit cost. Information cost is the cost related to evaluating the investment characteristics of financial assets, and the evaluation is to find financial assets with expected amount and cash flow possibility.

Extended data:

I. Classification of financial markets

1. According to the geographical scope of financial markets, financial markets can be divided into domestic financial markets and international financial markets.

The formation of international financial market is based on the development of domestic financial market to a certain height. At the same time, the formation of international financial market has further promoted the development of domestic financial market.

2. According to the types of business or financial products, financial markets can be divided into money market, capital market, foreign exchange market, insurance market, gold market and other markets (such as leasing market and pawn market).

3. According to the function of financial market, financial market is divided into issuing market and trading market.

4. According to the transaction mode, it can be divided into securities market and lending market.

5. According to the trading period, it can be divided into long-term capital market and short-term capital market. The former refers to the capital market, while the latter refers to the money market.

6. According to whether the transaction has a fixed place, it can be divided into tangible market and intangible market.

7. According to the delivery time of trading financial products, it can be divided into spot market and futures market.