NCERT Solutions for Class 12 Business Studies Chapter 10 Financical Market
Class 12 Business Studies Solutions Chapter 10 Financical Market By StudyEducation Short Answer Type Questions 1. What are the functions of a Financial Market? Ans: Financial market plays an important role in the allocation of scarce resources in an economy by performing the following four important functions (i) Mobilisation of Savings and Channelising Them into the Most Productive Uses A financial market facilitates the transfer of savings from savers to investors. It gives choice to the saver of different investments and thus, it helps to channelise surplus funds into the most productive use. (ii) Facilitate Price Discovery In a financial market, the households are suppliers of funds and business firms represent the demand. The interaction between them helps to establish a price for the financial asset which is being traded in that particular market. (iii) Provide Liquidity to Financial Assets Financial markets facilitate easy purchase and sale of financial assets. Flolders of asset...