Class 12 Business Studies - Chapter Financial Markets NCERT Solutions | Explain the structure and components of
Explain the structure and components of the Capital Market.
The capital market is a major component of the financial system, dealing with long-term investments. It consists of two segments:
- Primary Market: This is where new securities are issued and sold to investors directly by companies (e.g., Initial Public Offerings or IPOs).
- Secondary Market: It provides a platform for the trading of previously issued securities. The stock exchange is the key player in the secondary market, allowing investors to buy and sell stocks. Key instruments in the capital market include:
- Equity Shares: Represent ownership in a company and provide dividends to shareholders.
- Debentures: Long-term bonds issued by companies to raise capital.
- Bonds: Debt securities issued by the government or companies that pay fixed interest to investors. The capital market helps in wealth creation, economic development, and efficient allocation of resources by linking savers and borrowers in the economy.
More Questions From Class 12 Business Studies - Chapter Financial Markets
- Q:-
India’s largest domestic investor Life Insurance Corporation of India has once again come to government’s rescue by subscribing 70% of Hindustan Aeronautics’ ₹4,200-crore initial public offering.
a. Which market is being reflected in the above case?
b. State which method of floatation in the above identified market is being highlighted in the case? (Primary Market)
c. Explain any two other methods of floatation. (Private Placement, Offer through prospectus, offer for sale). - Q:-
Explain the objectives and functions of the SEBI.
- Q:-
What is the common name for Beneficiary Owner Account, which is to be opened by the investors for trading in securities?
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State any two reasons why investing public can expect a safe and fair deal in the stock market. (Point w.r.t safety of Transactions – Functions of the Stock Exchange).
- Q:-
Explain the recent Capital Market reforms in India.
- Q:-
Lalita wants to buy shares of Akbar Enterprises, through her broker Kushvinder. She has a Demat Account and a bank account for cash transactions in the securities market. Discuss the subsequent steps involved in the screen-based trading for buying and selling of securities in this case.
- Q:-
Name the document prepared in the process of online trading of securities that is legally enforceable and helps to settle disputes/claims between the investor and the broker.
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“Money Market is essentially a Market for short term funds.” Discuss.
- Q:-
State the objective of NSE?
- Q:-
Name any two details that need to be provided by the investor to the broker while filling a client registration form.
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