Key Words II.

Very Short Answer Questions:

Financial Market Debt Market 1. 
What are the components of organized
Equity Market New Issue Market sectors?
2. What is Spot Market?
3. What is Debt Market?
4. How is price decided in a Secondary Market?
Exercise
III. Short Answer Questions:
1. Give the meaning of Financial Market.
I. Choose the Correct Answers:
2. Write a note on Secondary Market.
1. Financial market facilitates business firms
3. Bring out the scope of Financial Market in
a) To rise funds
India.
b) To recruit workers
c) To make more sales IV. Long Answer Questions:
d) To minimize fund requirement
1. Distinguish between New issue market and
2. Capital market is a market for Secondary Market. (any 5)
a) Short Term Finance 2. Enumerate the different types of Financial
b) Medium Term Finance Markets. (any 5)
c) Long Term Finance 3. Discuss the role of Financial Market.
d) Both Short Term and Medium Term Finance
References:
3. Primary market is also called as
1. BhallaV.K, (2013), “Investment
a) Secondary market b) Money market Management Security Analysis and Portfolio
c) New Issue Market d) Indirect Market Management”, S. Chand & Company Pvt.
Ltd., Ram Nagar, New Delhi.
4. Spot Market is a market where the delivery
2. Ranganatham. M [Link]., (2006) “.Investment
of the financial instrument and payment
Analysis and Portfolio Management”,
of cash occurs
ISBN 978-81-7758-229-1, Dorling
a) Immediately b) In the future Kindersley(India) [Link]., licensees of
c) Uncertain d) After one month Pearson Education in South Asia.
5. How many times a security can be sold in 3. Rustagi.R.P, (2005), “Investment
a secondary market? Management Theory and Practice”,
a) Only one time b) Two time Published Sultan Chand & Sons, 23,
c) Three times d) Multiple times Daryaganj, New Delhi.

Answers: 4. [Link]/difference-
1 a 2 c 3 c 4 a 5 d between-primary-market-and-secondary-
[Link]#Definition

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12th Commerce Unit [Link] 27 09-12-2021 11.18.31 AM

 The foreign exchange market abets the Derivatives market facilitates the trading in
foreign exchange trading. It is the largest, most financial instruments such as futures contracts
liquid market in the world with an average and options used to help control financial risk.
traded value of more than $5 trillion per day. The instruments derive their value mostly from
It includes all of the currencies in the world the value of an underlying asset that can come
and any individual, company or country can in many forms – stocks, bonds, commodities,
participate in it. currencies or mortgages.
I. Commodity Market
Gilt-Edged Market also known as
The commodity market manages the trading
in primary products which takes place in Government Securities market is
about 50 major commodity markets where the market for Government and
financial transactions increasingly outstrip semi-Government securities. An important
physical purchases which are to be delivered. feature of the securities traded in this market
Commodities are commonly classified in two is that they are stable in value and are much
subgroups. sought after by banks.
• Hard Commodities Market
• Guaranteed return on investments
• Soft Commodities Market • No speculation in securities
• Institutional based investors which are
compelled by law to invest a portion of
their funds in these securities.
• 
Predominated by such institutions as
LIC, GIC, PFs and the commercial banks
• 
Heavy volume of transactions
necessitating negotiation of each
transaction

Hard commodities are raw materials typically

mined, such as gold, oil, rubber, iron, and ore.
Exercise
Soft commodities are typically grown
agricultural primary products such as wheat,
cotton, coffee, and sugar.
I. Choose the Correct Answers:
II. Derivatives Market 1. Capital market do not provide
a) Short term Funds
b) Debenture Funds
c) Equity Funds
d) Long term Funds

2. When the NSEI was established

a) 1990 b) 1992
c) 1998 d) 1997
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12th Commerce Unit [Link] 33 09-12-2021 11.18.33 AM

 3. Primary market is a Market where securities IV. Long Answer Questions:
are traded in the
1. Discuss the characters of a Capital Market.
a) First Time b) Second Time
2. Briefly explain the functions of Capital
c) Three Time d) Several Times
Market. (any 5)
4. Participants in the Capital Market includes
3. Explain the various types of New Financial
a) Individuals b) Corporate
Institutions. (any 5)
c) Financial Institutions d) All of the above

5. The _______ was set up by a premier References:

financial institution to allow the trading
1. [Link],K 2017, Business Organisation,
of securities across the electronic counters Vijay Nicole Imprints Pvt Ltd., Chennai.
throughout the country.
2. [Link] 2012, Financial Markets
a) OTCEI b) Factoring
and Institutions
c) Mutual Funds d) Venture Funds
Institutions 3. Ranganatham.M [Link].,(2006). “Investment
Analysis and Portfolio Management”,
Answers:
ISBN 978-81-7758-229-1, Dorling
1 a 2 b 3 a 4 d 5 a Kindersley(India) [Link]., licensees of
Pearson Education in South Asia.
II. Very Short Answer Questions:
4. 
BhallaV.K, (2013), “Investment
1. What is Capital Market?
Management Security Analysis and Portfolio
2. Write a note on OTCEI. Management”, S. Chand & Company Pvt.
3. W
 ho are the participants in a Capital Market? Ltd., Ram Nagar, New Delhi.

4. How is price determined in a Capital Market? 5. [Link]/

definition/capital-market
III. Short Answer Questions:
6. w w w . s h o d h g a n g a . i n f l i b n e t .
1. W
 hat are the various kinds of Capital [Link]/bitstream/10603/33042/11/
Market? Explain (any 3) 11_chapter%[Link]
2. Explain any two functions of Capital Market.
7. [Link]
3. E
 xplain about Factoring and Venture Capital stock-exchanges-world-heres-much-
Institutions. theyve-gained-2017/

34

12th Commerce Unit [Link] 34 09-12-2021 11.18.33 AM

 London Money Market is the oldest,
Exercise
most developed and leading Money
Market in the world.
New York Money Market is ranked as
the second well-developed Money Market in
the world next only to the London Money I. Choose the Correct Answers:
Market.
1. The money invested in the call money
market provides high liquidity with
_________________.
For Future Learning
a) Low Profitability
How to Invest Money in Money Market b) High Profitability
Funds?
c) Limited Profitability
Gathering information about Money
Market Funds d) Medium Profitability

Learn about money market 2. A major player in the money market is

Understand the goal of money market the _________________.
funds. a) Commercial Bank
Learn the disadvantages of money market b) Reserve Bank of India
funds.
c) State Bank of India
Investing in Money Market Funds
Understand the different types of Money d) Central Bank.
Market Funds 3. Debt Instruments are issued by Corporate
Understand the purpose of Money Market Houses are raising short-term financial
Funds resources from the money market are
Compare past yields called __________.
Buying and Tracking of Money Market a) Treasury Bills
Funds b) Commercial Paper
c) Certificate of Deposit
For Own Thinking d) Government Securities
If you earn money, which investment plan 4. 
The market for buying and selling of
would you like?
Commercial Bills of Exchange is known
1. Mutual Funds
2. Shares as a __________.
3. Debentures a) Commercial Paper Market
4. Treasury Bill
b) Treasury Bill Market
5. Commercial Bill
6. Certificate of Deposit c) Commercial Bill Market
Why? Give reasons.
d) Capital Market
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12th Commerce Unit [Link] 42 09-12-2021 11.18.33 AM

 5. A marketable document of title to a time 3. Explain the types of Treasury Bills? (any 3)
deposit for a specified period may be 4. What are the types of Commercial Bill? (any 3)
referred to as a __________.
a) Treasury Bill IV. Long Answer Questions:
b) Certificate of Deposit 1. Differenciate between the Money Market and
c) Commercial Bill Capital Market. (any 5)
d) Government. Securities 2. Explain the characteristics of Money Market?
Answers: (any 5)

1 a 2 a 3 b 4 c 5 b 3. What are the characteristics of Government

Securities? (any 5)
II. Very Short Answer Questions:
1. What is a CD market? References:
2. What is Government Securities Market? 1. Financial Markets and Services – [Link]
3. What do you meant by Auctioning? and Natarajan,

4. What do you meant by Switching? 2. Investment Management Security Analysis

and Portfolio Management – Dr. L Natarajan,
III. Short Answer Questions: 3. Financial Services (Indian Financial System) –
1. What are the features of Treasury Bills? (any 3) Prof. B. Santhanam, Financial Marketing –
2. Who are the participants of Money Market? (any 3) Dr. Gurusamy

43

12th Commerce Unit [Link] 43 09-12-2021 11.18.33 AM