Students can go through AP Inter 2nd Year Commerce Notes 4th Lesson Financial Markets will help students in revising the entire concepts quickly.
AP Inter 2nd Year Commerce Notes 4th Lesson Financial Markets
→ A financial market is a place where buyers and sellers participate in the trade of financial assets such equities, bonds, currencies etc.
→ A financial market is classified into money market and capital market.
→ The money market is a market for short term funds which deals in financial assets whose period of maturity is less than one year.
→ The components of money market are
- Call money market
- Acceptance market
- Bill market
- Collateral loan market.
→ The instruments in money market are
a) Treasury bills
b) Commercial paper
c) Call money
d) Certificates of deposits
e) Commercial bills
f) Collateral loans.
→ Capital market is a place where institutional arrangements are made for long-term funds both equity and debt.
→ Capital market is classified into primary market and secondary market. In primary market new securities are issued for first time. Secondary market or stock exchange is a market for purchase and sale of existing securities.
→ Capital markets instruments are SPN, deep discount bohds, equity shares with detachable warrants, fully convertible debentures with interest, sweat equity shares, disaster bonds, foreign currency convertible bonds are derivaties.
→ Stock exchange is a body of individuals, constituted for the purpose of assisting, regulating or controlling the business of buying and selling or dealing in securities.
→ SEBI was established by the Government of India as an interim administrative body to promote orderly and healthy growth of securities market and to protect investors.