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प्रश्न
State any four functions of 'Secondary - Market'.
उत्तर
The four functions of secondary market are enlisted below.
- One of the basic functions of secondary market is to provide liquidity and marketability to the already existing financial assets and securities. It provides a ready platform for the trading of existing securities.
- It enables a constant valuation of the securities and helps in building the demand and supply. In this way, it helps in determining the price of the securities.
- It ensures safety and fairness in transactions.
- It provides a platform for channelising the savings to the most productive use. In this way, it facilitates growth and development of the economy.
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संबंधित प्रश्न
Differentiate between `capital-market' and 'money-market' on the following basis:
Investment outlay
Differentiate between `capital-market' and 'money-market' on the following basis:
Duration
Differentiate between `capital-market' and 'money-market' on the following basis:
Liquidity
Differentiate between 'capital-market' and 'money-market' on the basis of:
Meaning;
Explain the following Money Market Instruments:
Treasury bill
Explain the following Money Market Instruments:
Commercial paper
Explain the following Money Market Instruments:
Call money
Capital market is a market for ______.
Spot Market is a market where the delivery of the financial instrument and payment of cash occurs
What is Spot Market?
What is Debt Market?
Differentiate Spot Market from Future Market.
Write a note on Secondary Market.
Enumerate the different kinds of Financial Markets.
Vedansh Limited has a share capital of ₹10,00,000 divided into shares of ₹100 each.For expansion purposes, the company requires additional funds of ₹ 5,00,000. The management is considering the following alternatives for raising funds :
Alternative 1: Issue of 5000 Equity shares of ₹100 each
Alternative 2: Issue of 10% Debentures of Rs. 5,00,000
The company’s present Earnings Before Interest and Tax ( EBIT) is ₹4,00,000 p.a. Assuming that the Rate of Return of Investment remains the same after expansion, which alternative should be used by the company in order to maximise the returns to the equity shareholders. The Tax rate is 50%. Show the working.
