Commerce · Ch 1 — Financial Markets

Key Terms

Financial Market — a market for the creation and exchange of financial assets, which links savers and investors.
Money Market — a market for short-term funds dealing in monetary assets with a maturity of up to one year.
Treasury Bills — instruments of short-term borrowing by the Government of India, issued at a discount by the RBI (also called Zero Coupon Bonds).
Commercial Paper — a short-term, unsecured, negotiable promissory note issued by large, creditworthy companies.
Call Money — very short-term finance (one to fifteen days) repayable on demand, used for inter-bank transactions.
Certificate of Deposit — an unsecured, negotiable, short-term instrument in bearer form issued by banks and financial institutions.
Commercial Bill — a bill of exchange used to finance the credit sales and working capital of business firms.
Mutual Fund — an institution that pools the savings of many investors and invests them in securities, and a participant in the money and capital markets.
Capital Market — the arrangements through which long-term funds, both debt and equity, are raised and invested.
Primary Market — the new-issues market, where securities are issued for the first time.
Secondary Market — the market for the purchase and sale of existing securities (the stock exchange).
Stock Exchange — an institution providing a platform for buying and selling existing securities. …