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Answer Each of These Questions in About One Hundred and Fifty Words: Explain How Capital Markets Are the Most Important Source of Raising Finance for an Entrepreneur. - Entrepreneurship

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प्रश्न

Answer each of these questions in about one hundred and fifty words:

Explain how capital markets are the most important source of raising finance for an entrepreneur.

टीपा लिहा

उत्तर

 Capital markets are the most important source of raising finance for the entrepreneurs. This market:

  1.  Mobilises the financial resources on a nation-wide scale.
  2. Secures the much required foreign capital and know-how to promote economic growth at a faster rate.
  3.  Ensures the most effective allocation of the mobilized financial resources by directing the same either to such projects which are capable of the highest yield or to the under developed priority areas where there is an urgent need to promote balanced and diversified industrialization. The needs of entrepreneurs who actually use the savings for productive purposes are varied. The capital market satisfies the tastes of savers and the needs of investors through its financial instruments and institutions.
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Types of Financial Market - Capital Market
  या प्रश्नात किंवा उत्तरात काही त्रुटी आहे का?
पाठ 6: Resource Mobilization - Section B: Financial Markets [पृष्ठ २४६]

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सीबीएसई Entrepreneurship Class 12
पाठ 6 Resource Mobilization
Section B: Financial Markets | Q 3.2 | पृष्ठ २४६

संबंधित प्रश्‍न

Answer the following question:
An investor wanted to incest RS. 20,000 in Treasury Bills for a period of 91 days. When he approached the Reserve Bank of India for this purpose he came to know that it was not possible.
Identify the reason why the investor could not invest in the Treasury Bill.


Explain the recent Capital Market reforms in India.


Answer each of these questions in about fifteen words:

Which sources provide the supply for long-term funds?


Answer each of these questions in about fifteen words

 identify the method of raising additional finance from existing shareholders by offering securities to them on pro-rata basis.


Answer each of these questions in about fifteen words:

What is a secondary market?


Answer each of these questions in about fifteen words:

What is the need of secondary market?


Answer each of these questions in about one hundred and fifty words:

What do you understand by capital market? How can the capital market in India be broadly classified into different categories?


Complete the correlation:

Money market : Short-term funds :: ______ : Long-term funds


Assertion and Reasoning:

  • Assertion (A): Regional stock exchanges have witnessed a sharp decline in the volume of trade.
  • Reasoning (R): Investors prefer to trade in securities listed in premier stock exchanges like BSE, NSE, etc.

Explain the following term/concept.

Secondary market


Justify the following statement.

Capital market is useful for corporate sector.


Complete the correlation.

Primary market: New issues launched to raise capital:: ______: Old issues through stock market.


Policy that aims at managing the quantity of money in order to meet the requirements of different sectors of the economy and to increase the pace of economic growth –


To be listed on OTCEI, the minimum capital requirement for a company is


What are the methods of floatation in Primary Market?


Read the following text and answer the following question on the basis of the same:

ISQM SOLAR Limited is searching for options to raise Rs. 20,000 crores from the primary market for diversification and modernisation of existing projects. It hired the services of a renowned financial consultancy firm, DHAN LAXMI Pvr LTD. to suggest options for the same. DHAN LAXMI PVI LTD. suggested a list of options to the Board of Directors of the company. It was decided that for the immediate requirement of Rs. 1,500 crores, the company will give a privilege to existing shareholders to subscribe to a new issue of shares according to the terms and conditions of the company. Rs. 4,500 crores would be raised by allotment of securities to a consortium of financial institutions, instead of inviting subscription from the public by making a direct appeal to investors to raise capital. It was further decided to raise capital to the tune of Rs. 6,000 crores through an issuing house. All these options were accepted by the Board of Directors. The Board further decided to raise Rs. 8,000 crores through the online system of the stock exchange by entering into an agreement with the exchange.

Identify the method of floatation of new issues in the primary market, not taken up by ISQM SOLAR LTD.:


Read the following text and answer the following question on the basis of the same:

ISQM SOLAR Limited is searching for options to raise Rs. 20,000 crores from the primary market for diversification and modernisation of existing projects. It hired the services of a renowned financial consultancy firm, DHAN LAXMI Pvr LTD. to suggest options for the same. DHAN LAXMI PVI LTD. suggested a list of options to the Board of Directors of the company. It was decided that for the immediate requirement of Rs. 1,500 crores, the company will give a privilege to existing shareholders to subscribe to a new issue of shares according to the terms and conditions of the company. Rs. 4,500 crores would be raised by allotment of securities to a consortium of financial institutions, instead of inviting subscription from the public by making a direct appeal to investors to raise capital. It was further decided to raise capital to the tune of Rs. 6,000 crores through an issuing house. All these options were accepted by the Board of Directors. The Board further decided to raise Rs. 8,000 crores through the online system of the stock exchange by entering into an agreement with the exchange.

"Rs. 4,500 crores would be raised by allotment of securities to a consortium of financial institutions, instead of inviting subscription from the public by making a direct appeal to investors to raise capital."

Identify the method of floatation of new issues in the primary market being discussed above, which the company has decided to use:


Read the following text and answer the following question on the basis of the same:

ISQM SOLAR Limited is searching for options to raise Rs. 20,000 crores from the primary market for diversification and modernisation of existing projects. It hired the services of a renowned financial consultancy firm, DHAN LAXMI Pvr LTD. to suggest options for the same. DHAN LAXMI PVI LTD. suggested a list of options to the Board of Directors of the company. It was decided that for the immediate requirement of Rs. 1,500 crores, the company will give a privilege to existing shareholders to subscribe to a new issue of shares according to the terms and conditions of the company. Rs. 4,500 crores would be raised by allotment of securities to a consortium of financial institutions, instead of inviting subscription from the public by making a direct appeal to investors to raise capital. It was further decided to raise capital to the tune of Rs. 6,000 crores through an issuing house. All these options were accepted by the Board of Directors. The Board further decided to raise Rs. 8,000 crores through the online system of the stock exchange by entering into an agreement with the exchange.

Identify the reason which has made the firm raise funds from the institutional investors :


Who plays a very vital role as a financial intermediary?


Which of the following statements is incorrect?


Which among the following is NOT a method of raising the required capital in the primary market?


Complete the correlation :

Money market: Short term funds:: ______ : Long term funds


Complete the correlation:

Money market : Short term funds :: ______ : Long term funds.


Complete the correlation:

Money market : Short term funds :: _____ : Long term funds. 


Complete the correlation:

Money market : Short term funds :: ______ Long term funds.


Complete the correlation:

Money market : Short term funds :: ______ : Long term funds


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