ch 10

Question 1

what are the functions of stock exchange

Answer 1

-providing liquidity and marketability to existing securities
-pricing of securities
-contributes to economic growth
-safety of transaction
-spreading of equity cult
-providing scope for speculation

Question 2

what are the functions of financial markets

Answer 2

-facilitating price discovery
-mobilisation of savings and channeling them into their most productive use
- reducing cost of transaction
-providing liquidity to financial assets

Question 3

what is new issue market called

Answer 3

primary market
or
first hand market

Question 4

list some participants if capital market

Answer 4

financial institutions
stock exchange
corporate entities
foreign investors
development banks
members of public

Question 5

name some participants of money market

Answer 5

rbi
banks
mutual funds
state government
financial institutions

Question 6

discuss the liquidity of capital market

Answer 6

considered liquid, but sometimes difficult to find a buyer for shares

Question 7

what is the liquidity of money market

Answer 7

high degree of liquidity
dfhi( discount finance house of india) set up with the objective of providing ready market for money market instruments

Question 8

list some advantages of electronic trading systems or screen based training

Answer 8

transparency
efficiency
participants from all over the world
single trading platform