Question 35 of 62
Q.Study the following case/situation and express your opinion:
Mr. A deals in import and export business so he needs different foreign currencies. For the expansion of his business, he borrows money from a commercial bank. He invests his funds in the equity shares.
From where does Mr. A borrow money?
Name the market where does Mr. A invest his funds.
Which type of currency is required for the international market?
Maharashtra MsbshseMaharashtra HSC (MSBSHSE) Board 2024Subjective· 3mImportance★★★★★
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Start your 14-day free trial to unlock the full solution →Mr. A's loan comes from a commercial bank, his equity-share investment is in the capital market, and international trade requires foreign currency (foreign exchange).
This case links banking services and financial markets to Mr. A's import-export business:
- From where does he borrow money? Businesses that need funds for expansion commonly obtain loans and advances from commercial banks, which accept deposits and lend money to trade and industry. So Mr. A borrows from a commercial bank.
- Where does he invest his funds? He invests in equity shares. Shares and other long-term securities are bought and sold in the capital market (securities market / stock market). Hence Mr. A's funds are invested in the capital market. …
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