12th commerce Guide Chapter 5: CAPITAL MARKET - Reduced syllabus 2021 based - Book back Questions and answer 

I. Very Short Answer Questions: 

1. What is Capital Market? 

1.  Capital market is a market where buyers and sellers engage in trade of financial securities like bonds, and stocks.
2.  The buying/selling is undertaken by participants such as individuals and institutions.

4. Who are the participants in a Capital Market? 

1. There are many players in the capital market. The participants of the capital market include individuals, corporate sectors, Govt., banks and other financial institutions..

5. How is price determined in a Capital Market?

1. After a company goes public and starts trading on the exchange, its price is determined by supply and demand for its shares in the market.

12th commerce guide Reduced syllabus 2021 based PDF Download

II. Short Answer Questions: 

1. What are the various kinds of Capital Market? Explain.

I Primary Market:

1. Primary market is a market for new issues or new financial claims. Hence, it is also called New Issue Market.

II Secondary Market:

1. Secondary Market may be defined as the market for old securities, in the sense that securities which are previously issued in the primary market are traded here. The trading takes place between investors.

12th commerce guide Reduced syllabus 2021 based PDF Download

III. Long Answer Questions: 

1. Discuss the characters of a Capital Market. 

(i) Securities Market: 

1. The dealings in a capital market are done through the securities like shares, debentures, etc. The capital market is thus called securities market. 

(ii) Price: 

1. The price of the securities is determined based on the demand and supply prevailing in the capital market for securities.

(iii) Participants: 

1. There are many players in the capital market. The participants of the capital market include individuals, corporate sectors, Govt., banks and other financial institutions. 

(iv) Location :

1. Capital market is not confined to certain specific locations, although it is true that parts of the market are concentrated in certain well known centers known as Stock Exchanges. 

(v) Market for Financial Assets:

1. Capital market provides a transaction platform for long term financial assets

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12th commerce guide Reduced syllabus 2021 based PDF Download