Class 12 Business Studies - ANDHRA-PRADESH
Financial Markets
The chapter 'Financial Markets' in Class 12 Business Studies for Andhra Pradesh (BSEAP) students explores the crucial link between savers and investors. It covers the concept, functions, and classification of financial markets into Money Market and Capital Market. You will learn about key financial instruments like Treasury bills, Commercial paper, and the working of stock exchanges, particularly SEBI and its regulatory functions. This chapter is vital for board exams as it tests conceptual clarity on how businesses raise short-term and long-term funds, frequently featuring direct short-answer questions and case studies.
Start Learning FreeKey Concepts
Financial Market
A market that creates and exchanges financial assets, bringing together those who save money and those who need to invest it.
Money Market
A market for short-term funds with instruments maturing within one year, helping businesses meet their working capital requirements.
Capital Market
A market that deals in long-term funds, comprising both primary markets (new issues) and secondary markets (stock exchanges).
Primary Market
Also known as the new issue market, it deals with newly issued securities directly between the company and investors.
Secondary Market
Also known as the stock market, it is where existing securities are bought and sold among investors, providing liquidity.
SEBI (Securities and Exchange Board of India)
The apex regulatory body established to protect investor interests and regulate the securities market in India.
Important Formulas
Board Exam Info
In the Andhra Pradesh (BSEAP) Class 12 Business Studies board exams, this chapter typically carries around 6 to 8 marks. Questions usually include very short answer questions (VSAQ) of 2 marks, short answer questions (SAQ) of 4 marks, and occasionally differentiation questions between Money Market and Capital Market.
Frequently Asked Questions
What is the main difference between Money Market and Capital Market?
Money market deals in short-term funds (up to 1 year) like T-bills, while capital market deals in long-term funds (above 1 year) like shares and debentures.
What are the primary functions of SEBI?
SEBI's main functions are protective (preventing malpractices), developmental (promoting market growth), and regulatory (controlling brokers and stock exchanges).
What is a Treasury Bill?
A Treasury Bill is a short-term money market instrument issued by the Reserve Bank of India on behalf of the Central Government to meet short-term liquidity requirements.
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