12 Questions
What is the primary purpose of financial markets?
To allocate financial resources efficiently
Who are the users of funds in the financial markets?
Households, businesses, and governments
What role do intermediaries like banks and mutual funds play in the financial markets?
They channelize surplus funds from lenders to users
Why is aggregation of funds from a large number of investors important in financial markets?
To make funds available for productive economic activity
What does an efficient financial market ensure regarding the transfer of funds?
Attractive costs for savers to save and lend, and for users to borrow funds
Why are providing liquidity and exit options important functions of financial markets?
To allow participants to review their funding decisions given new information
What is the main focus of financial market regulations and regulators?
Streamlining fund transfer activities
According to the SCRA, 1956, which of the following is NOT included in the definition of securities?
Gold receipts
What is the role of securities markets in the economy?
Allocation of savings to investments
Which entity possesses the authority to declare new instruments as securities according to the text?
Central Government
What is the purpose of decoupling savings from investments through securities markets?
To alleviate constraints on savings and investments
Which type of instrument is an 'Electronic Gold Receipt' as per the Securities and Exchange Board of India?
Electronic receipt for physical gold deposits
Explore the role of financial markets in facilitating the efficient transfer and allocation of financial resources for productive activities. Learn how households, businesses, and governments both use and provide surplus funds, with the help of intermediaries like banks, financial institutions, mutual funds, and insurance companies.
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