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.