A basic requirement for an effective financial system is a monetary system that performs which of the following financial functions?

For a financial system to function effectively, it is essential that there be a monetary policy.

1. Facilitate trade of goods and services
2. Stabilize the price.
3. Securely store and transfer value over time efficiently and economically.
4. Assist in managing risk using hedging or diversification instruments, such as insurance products and derivatives.
5. Individuals, companies, and any other entity in need of credit can have access.

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