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Question
Justify the following statement.
Financial markets acts as link between investor and borrower.
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Solution
- The financial market provides a platform where both, buyers and sellers can find each other easily.
- Investors who have savings are linked with entrepreneurial borrowers that require investment.
- As a result, the idle funds in the hands of investors can be productively used by corporates.
- This market enables investors to invest their saving according to their choices and risk assessment.
- Hence, financial markets acts as link between investor and borrower.
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RELATED QUESTIONS
Match the pair.
| Group ‘A’ | Group ‘B’ |
| a) Financial market | 1) Long term fund |
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| c) Primary market | 3) Trading of commodities |
| d) Commercial paper | 4) Short term fund |
| 5) Trading of financial securities | |
| 6) Share market | |
| 7) Unsecured promissory note | |
| 8) Secured promissory note |
Write a word or a term or a phrase which can substitute the following statement.
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A market that exclusively deals with the new issue of securities
Money market is the market for the long term funds.
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Secondary market is commonly known as stock market.
Find the odd one.
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When trade bills are accepted by commercial banks, it is known as _________.
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In capital market the instruments traded have maturity period of more than ______ year.
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Answer in one sentence.
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Commercial bills
Answer in brief.
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Money market makes available short term finance through different instruments.
