Class 12 Business Studies - CBSE
Financial Markets
The chapter 'Financial Markets' in CBSE Class 12 Business Studies explores how funds are mobilized between savers and investors. It covers the crucial role financial markets play in economic development by facilitating the exchange of financial assets. Students will learn about the two major segments: the Money Market, dealing in short-term instruments, and the Capital Market, dealing in long-term securities. The chapter also details the functions and trading procedures of the stock exchange, along with the regulatory role of SEBI. This is a high-scoring, conceptual chapter frequently tested in board exams through direct and case-based questions.
Start Learning FreeKey Concepts
Financial Market
A link between households who save funds and business firms that invest them, facilitating the transfer of funds.
Money Market
A market for short-term funds with a maturity period of up to one year, dealing in monetary assets like Treasury bills and Commercial Paper.
Capital Market
A market that deals in medium and long-term funds, comprising both primary (new issues) and secondary (stock exchange) markets.
Primary Market
Also known as the new issue market, it deals with new securities being issued to investors for the first time to raise fresh capital.
Secondary Market
Also known as the stock market or stock exchange, it is where existing securities are bought and sold among investors.
SEBI (Securities and Exchange Board of India)
The apex regulatory body established to protect investors' interests and promote the orderly development of the securities market.
Important Formulas
Board Exam Info
In the CBSE Class 12 Business Studies board exam, this chapter typically carries around 6 to 8 marks. Questions often include distinguish-between formats (e.g., Money Market vs. Capital Market, Primary Market vs. Secondary Market), functions of SEBI, and application-based case studies on stock exchange trading procedures.
Frequently Asked Questions
What is the difference between primary and secondary markets?
The primary market deals with the issuance of new securities directly from the company to investors, whereas the secondary market deals with the trading of already existing securities among investors.
What are the main functions of SEBI?
SEBI performs protective functions (protecting investor interests), developmental functions (promoting training and market efficiency), and regulatory functions (controlling brokers and insider trading).
What instruments are traded in the money market?
Common money market instruments include Treasury Bills, Commercial Paper, Call Money, Certificate of Deposit, and Commercial Bills.
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