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Question
What is meant by the financial market?
Solution
A financial market is a market for the creation and exchange of financial assets. Financial markets exist wherever a financial transaction occurs. Financial transactions could be in the form of the creation of financial assets such as the initial issue of shares and debentures by a firm or the purchase and sale of existing financial assets like equity shares, debentures, and bonds.
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RELATED QUESTIONS
Distinguish between money market and capital market.
The market where existing securities are resold or traded is called __________ market.
(a) commodity
(b) secondary
(c) primary
State, with reasons, whether the following statements are True or False
The financial market contributes towards the nation's economic growth and development.
Match the pairs :
| Group "A" | Group "B" | ||
| 1. | Private placement | a. | Recurring Deposit |
| 2. | N.S.D.L | b. | Dividend |
| 3. | Overdraft facility | c. | Evidence of deposit |
| 4. | Deposit receipt | d. | Interest |
| 5. | Returns on share | e. | Depository out of India |
| f. | A public company collecting capital privately |
||
| g. | Depository in India | ||
| h. | Evidence of ownership | ||
| i. | A private company collecting capital privately |
||
| j. | Current account |
Write a word or a term or a phrase which can substitute the following statement :
A definite promise in writing from a buyer for paying the amount on a specific Date.
Answer the following question.
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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 _________.
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____________ is the market for borrowing and lending long term capital required by business enterprises.
Write a word or a term or a phrase which can substitute the following statement.
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Answer in brief.
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Match the FUNCTIONS of Financial Markets in Column I with their correct MEANING in Column II
| Column I | Column II | ||
| (a) | Allocated Function | (i) | Establish a price for the financial asset through interaction between house-holds and business firms. |
| (b) | Facilitating Price Discovery | (ii) | Easy purchase and sale of financial assets. |
| (c) | Financial Assets Liquidity | (iii) | Mobilization of savings and channelising them into the most productive use. |
______ 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?
Match the various terms of Financial Markets Column - I with their respective Statements in Column - II
| Column - I | Column - II | ||
| a. | Financial market | i | It is also known as the Stock market |
| b. | Primary market | ii | It is a market for creation and exchange of financial assets. |
| c. | Secondary market | iii | It is also known as New issue market |
______ market where the company trades shares for the first time.
Distinguish between:
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