Advertisements
Advertisements
Question
Justify the following statement.
Capital market is useful for the corporate sector.
Advertisements
Solution
- The capital market is a market that provides long-term loans. It is controlled by SEBI.
- The capital market trades in shares, debentures, and mutual funds.
- The business sector issues these securities to the market and attracts savings from investors through a number of schemes.
- Through this market, corporations, industrial organisations, and financial institutions can access long-term funds from both domestic and overseas markets.
- These savings are converted into capital and used to invest in the firm.
- It helps to develop the corporate and industrial sectors. Thus, the capital market benefits the corporate sector.
APPEARS IN
RELATED QUESTIONS
Answer each of these questions in about fifteen words:
What is the need of secondary market?
Answer each of these questions in about one hundred and fifty words:
State the nature of money market. Who are the major participants in the money market?
Answer each of these questions in about one hundred and fifty words:
Write down the sectors of organized and unorganized market.
Differentiate between the money market and the capital market.
Primary market is also known as new issue market.
What are the methods of floatation in Primary Market?
Read the following text and answer the following question on the basis of the same:
ISQM SOLAR Limited is searching for options to raise Rs. 20,000 crores from the primary market for diversification and modernisation of existing projects. It hired the services of a renowned financial consultancy firm, DHAN LAXMI Pvr LTD. to suggest options for the same. DHAN LAXMI PVI LTD. suggested a list of options to the Board of Directors of the company. It was decided that for the immediate requirement of Rs. 1,500 crores, the company will give a privilege to existing shareholders to subscribe to a new issue of shares according to the terms and conditions of the company. Rs. 4,500 crores would be raised by allotment of securities to a consortium of financial institutions, instead of inviting subscription from the public by making a direct appeal to investors to raise capital. It was further decided to raise capital to the tune of Rs. 6,000 crores through an issuing house. All these options were accepted by the Board of Directors. The Board further decided to raise Rs. 8,000 crores through the online system of the stock exchange by entering into an agreement with the exchange.
Identify the method of floatation of new issues in the primary market, not taken up by ISQM SOLAR LTD.:
Who plays a very vital role as a financial intermediary?
State any one advantage each for a company that opts for private placement and rights issue as a source to raise funds.
Complete the correlation:
Money market : Short-term funds :: ______ : Long-term funds.
Complete the correlation:
Money market : Short term funds :: ______ : Long term funds
Complete the correlation.
Money market : Short term funds :: ______: Long term funds
What does the capital market help support as an important part of the financial system?
Which sectors demand long‑term funds?
Which are sources of long‑term funds supplied to the capital market?
Which group supplies long‑term funds to the capital market?
Which pair names banks that form part of the capital market?
Which pair is also included among capital market instruments?
What do capital markets use to connect participants in the market?
Capital markets lead to what?
