Exam (elaborations)
ECS2605 Assignment 03 Semester 1 2023 Detailed Solutions
- Institution
- University Of South Africa (Unisa)
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South African Financial SystemECS2605
ASSIGNMENT 03 SEMESTER 01 2023
QUESTION 1
Define any two (2) types of participants in the financial market.
• Borrowers- issue the securities. Issuers can be companies or governments, and they
use the capital raised from the sale of securities to fund operations, finance projects,
or repay debt.
• Lenders (or investors) - buy or invest in securities. They can be individuals, companies,
or institutions, and they invest their money in financial instruments such as stocks,
bonds, and mutual funds. Investors seek to generate returns on their investments
through capital appreciation or income.
• Brokers (agents) - act as conduits between the borrowers and the lenders or the buyers
and the sellers and in term get paid a commission.
QUESTION 2
2.1.1. Discuss the three types of stokvels in South Africa.
Stokvels are informal savings and investment groups that are popular in South Africa and
other African countries. They are essentially a type of collective investment scheme, where a
group of people pool their money together on a regular basis to achieve a specific goal.
The members of a stokvel typically agree on a common savings goal, such as buying
groceries, paying school fees, or investing in property. Each member contributes a fixed
amount of money at regular intervals, such as weekly or monthly. The money is then used to
achieve the agreed-upon goal, with each member taking turns to receive the full amount of
the pooled funds.
Types of stokvels
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