Q.Give the meaning of Financial Market.

A financial market is a market where financial assets (shares, bonds, currency) are created and exchanged, linking savers with borrowers and channelling savings into investment.

The financial market is the marketplace for financial assets, studied at the start of the financial-market unit of the Tamil Nadu HSC Class-12 Commerce syllabus.

Meaning: A financial market is a market for the creation and exchange of financial assets such as shares, debentures, bonds, treasury bills and foreign currency. It provides a channel through which the savings of surplus units (households, institutions with surplus funds) flow to the deficit units (businesses and government that need funds).

Role/importance in brief:

• It mobilises savings and channels them into the most productive investments.
• It helps in price determination of financial assets through demand and supply.
• It provides liquidity — assets can be readily bought and sold. …