ECONOMICS
FINANCIAL MARKETS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Where finance is available at higher cost.
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Must provide insufficient information to investors.
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Where market operations are inconsistent.
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Which facilitates economic growth.
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Detailed explanation-1: -Capital markets allow traders to buy and sell stocks and bonds, and enable businesses to raise financial capital to grow. Businesses also have reduced risk and expenses in acquiring financial capital because they have reliable markets where they can obtain funding.
Detailed explanation-2: -An ideal capital market is defined by a set of five assumptions. 1: Capital markets are frictionless. 2: All market participants share homogenous expectation, value relevant information is costlessly available to all market participants. 3: All market participants are atomistic.
Detailed explanation-3: -The capital market aids economic growth by mobilizing the savings and directing the same towards productive use. This is facilitated through the following measures or ways: 1.
Detailed explanation-4: -The capital Market helps in the proper allocation of resources from the people who have surplus capital to the people who are in need of capital. So, we can say that it helps in the expansion of industry and trade of both public and private sectors leading to balanced economic growth in the country.