Chapter – X

Capital Market
(4+ 4 = 8 Marks) 60-80 words

What is meant by capital market? Describe its nature. – 4 marks

• It is a market where all organizations, financial institutions and instruments provide long and medium term funds to the business sector.
• The two major components of capital market are
  • Primary (new issue market)
  • Secondary market (stock exchange).

The nature of capital market can be understood from the following points:

• It acts a link between savers and borrowers who need funds to invest profitably and efficiently.
• It helps firms to procure finances for long-term investments such as buying plant & machinery, building, etc.
• It obtains its funds through issue of various securities such as equity shares, bonds, debentures and innovative securities like zero interest bonds and deep discount bonds.
• It functions thru’ various intermediaries such as underwriters, bankers, stock brokers, etc.
• It includes both individual investors and institutional investors such as UTI, LIC, IDBI, etc

State any four PROTECTIVE functions of SEBI? (What is insider trading)?....................

Get Your Dream Job.Post Your Resume Online.