(i) Financial markets contribute to a nation's growth by ensuring an unfettered flow of surplus funds to deficit units.
(ii) Flow of funds for productive purposes is also made possible. It leads to overall economic growth.

Financial Markets contribute to the development of the entrepreneurial class by making available the necessary financial resources

The different components of financial markets help an accelerated growth of industrial and economic development of a country thus contributing to raising the standard of living and the society's well being.

Financial assets can be classified differently under different circumstances. One such classification is :
(i) Marketable assets
(ii) Non-marketable assets
(I) Marketable Assets:
(a) Marketable assets are those which can be easily transferred from one person to another without much hindrance:
(b) Example: Shares of Listed companies, Government securities, Bonds of Public sector undertakings etc.
(ii) Non marketable Assets:
(a) If the assets cannot be transferred easily, they come under this category.
(b) Example: Bank deposits, Provident funds, Pension funds, National savings Certificates, Insurance policies etc.

(a) Primary market:
(i) Primary market is a term used to include all the institutions that are involved in the sale of securities for the first time by the issuers.
(ii) Here the money from investors goes directly to the issuers.
(b) Second by market:
(i) Secondary market is the market for securities that are already issued.
(ii) Stock exchange is an important institution in the secondary market