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प्रश्न
The financial market plays an important role in the allocation of scarce resources in an economy by performing many important functions.’ Explain any three such functions
उत्तर
A financial market is a market for the creation and exchange of financial assets (such as shares and debentures).
Major functions of a financial market:
i. Mobilising savings: The financial market acts as a channel for mobilising savings to productive use. This is done by providing savers a platform for transferring investment. It provides savers a wide choice of investment. In this way, it ensures that the funds are directed towards the most productive investment.
ii. Establishing price: The financial market facilitates the interaction between those who demand securities (households) and the suppliers of securities (business firms). This helps in establishing a competing price for the securities.
iii. Providing liquidity to assets: By easing the process of sale and purchase of securities, the financial market provides liquidity to securities. That is through the financial market, securities can be easily converted to cash.
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संबंधित प्रश्न
Today, the development of a country is also judged by its system of transferring finance from the sector where it is in surplus to the sector where it is needed the most. To give strength to the economy SEBI is undertaking measures to develop the capital market. In addition to this, there is another market in which unsecured and short-term debt instruments are actively traded every day. These markets together help the savers and investors in allocating the available funds into their most productive investment opportunity.
1)Name the function being performed by the market in the above case.
2) Also, explain three other functions performed by this market.
Bharat Express specialises in Courier Services. Its 'wide range of express package and parcel services' help business firms to make sure that the goods are made available to the customers at the right place and at the right time. A state with reason, whether the working capital requirements of 'Bharat Express' will be high or low
What are the functions of Financial Market?
Select the correct answer from the options given below and rewrite the statement.
A financial market is a market in which people trade _____________ and derivatives at low transaction costs.
Select the correct answer from the options given below and rewrite the statement.
When the trade bills are accepted by commercial banks it is known as _________.
State whether the following statement is true or false
A Financial Market is a market in which people trade financial securities and derivatives at high transaction costs.
Find the odd one.
Explain the following term/concept.
Capital market
Distinguish between the following.
Primary market and Secondary market
Answer in brief.
State any four functions of the financial market.
Answer the following question
State the features of capital market.
What are the functions of a financial market?
______ is short-term finance repayable on demand, with a maturity period of one day to fifteen days.
Which of the following statements is incorrect regarding Financial Markets?
What is meant by the financial market?
______ market where the company trades shares for the first time.
