In September 1990 a study by the U.S congress, Office of technology Assessment, entitled " Electronic Bulls & Bears: U.S security Markets and Information Technology ," included this statement:
They make it possible for corporations and governmental units to raise capital.
a. They help to allocate capital towards productive uses.
b. They provide an opportunity for people to increase their savings by investing in them.
c. They reveal investors judgments about the potential earning capacity of corporation, thus giving guidance to corporate managers.
d. They generate employment and income.
For each of the function cited above, explain how financial markets ( or security markets, in the parlance of this congressional study ) perform each function.