Commerce · Class 12 Commerce
Ch 4Introduction to Financial Markets — Class 12 Commerce, concept-first.
Every economy has two kinds of economic units at any given time — surplus units (households and institutions that save more than they currently spend) and deficit units (businesses and governments that need more funds than they currently have, to invest in projects, expand operations, or meet public spending).
Key concepts
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Meaning and Functions of Financial Markets
A financial market is the mechanism/institutional arrangement through which financial assets are created and traded, channelling funds from surplus units (savers) to deficit units (borrowers); its key functions are mobil…
Most relevant Q&A
Chapter contents
The NCERT structure, section by section. Open a section to see its questions, then read the concept-first solution.
Meaning and Functions of Financial Markets
Every economy has two kinds of economic units at any given time — surplus units (households and institutions that save more than they currently spend) and deficit units (businesses and governments tha…
Classification by Nature and Maturity of Claim
Financial markets are classified along several different angles at once — the same market can be described from more than one angle simultaneously (for example, a particular transaction can be a prima…
Classification by Seasoning and Timing of Claim
Two further classification angles matter just as much as the ones already covered — the seasoning of the claim (is the security being issued for the first time, or is it an already-existing security c…
Constituents of the Financial Market
A financial market is not a single institution — it is made up of several distinct groups of participants, each playing a different role, working together to move funds from savers to borrowers.
Role and Importance of Financial Markets in the Indian Economy
In a developing economy such as India's, financial markets play a role that goes well beyond simply connecting individual savers to individual borrowers — they are a genuine engine of overall economic…
Exercises
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- Q1What is a financial market? Give its definition.Free
- Q2Explain the functions of a financial market.Free
- Q3Distinguish between the debt market and the equity market.Free
- Q4Distinguish between the money market and the capital market.Preview
- Q5Distinguish between the primary market and the secondary market.Preview
- Q6Distinguish between the cash/spot market and the forward/derivatives market.Preview
- Q7Who are the constituents of a financial market? Explain briefly.Preview
- Q8Explain the role of RBI and SEBI as regulators of the financial market.Preview
- Q9Discuss the role of financial markets in the Indian economy.Preview
- Q10"Financial markets are indispensable for the growth of a developing economy." Justify this statement with reference to their functions and r…Preview
Sample & Board Papers
Sample papers and previous-year board questions for this subject.
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- Q1Which of the following is not a correct pair? (a) Forward Market - Future Market (b) Debt Market - Government Bonds (c) Money Market - Comme…Preview
- Q2What is Government Securities Market?Preview
- Q3Give the meaning of Financial Market.Preview
- Q4Financial Market facilitates business firms ______. (a) To make more sales (b) To raise funds (c) To minimize fund requirement (d) To recrui…Preview
- Q5(a) Enumerate the different types of Financial Markets. (Any five) OR (b) Explain the various types of tests. (Any five)Preview