Class 12 Business Studies - KERALA
Financial Markets
The chapter 'Financial Markets' in Class 12 Business Studies for Kerala SCERT explores the arena where financial assets are created and exchanged. It covers the meaning and functions of financial markets, distinguishing between the Money Market (for short-term funds) and Capital Market (for long-term funds). Students will learn about primary and secondary markets, the role of stock exchanges like the NSE and BSE, and the regulatory functions of SEBI. This chapter is vital for board exams as it carries significant weightage, frequently featuring direct questions on money market instruments, distinctions between primary and secondary markets, and SEBI functions.
Start Learning FreeKey Concepts
Financial Market
A link between households who save funds and business firms that invest them, facilitating the transfer of finance.
Money Market
A market for short-term monetary assets with maturities up to one year, dealing in instruments like Treasury Bills and Commercial Paper.
Capital Market
A market that deals in medium and long-term funds, comprising both primary and secondary markets.
Primary Market
Also known as the new issue market, where companies raise fresh capital by issuing new shares or debentures directly to investors.
Secondary Market
Commonly known as the stock market or stock exchange, where existing securities are bought and sold among investors.
SEBI (Securities and Exchange Board of India)
The apex regulatory body established to protect investor interests and promote the orderly development of the securities market.
Important Formulas
Board Exam Info
In the Kerala SCERT Class 12 Business Studies board examination, this chapter typically carries around 6 to 8 marks. Common question types include direct differentiation questions (e.g., Money Market vs. Capital Market, Primary Market vs. Secondary Market), short notes on money market instruments, and essay or application-level questions regarding the functions and objectives of SEBI.
Frequently Asked Questions
What is the difference between Primary Market and Secondary Market?
In the primary market, companies sell new securities directly to investors for the first time. In the secondary market, investors trade previously issued securities among themselves through a stock exchange.
What are the main instruments traded in the Money Market?
The main money market instruments are Treasury Bills, Commercial Paper, Call Money, Certificate of Deposit, and Commercial Bills.
What are the primary functions of SEBI?
SEBI's functions are categorized into regulatory functions (regulating brokerages, insider trading), developmental functions (training intermediaries, investor education), and protective functions (safeguarding investor interests, checking unfair trade practices).
Learn Financial Markets with Your AI Tutor
10 different ways to study this chapter. Free for 3 chapters per day.
Lecture
Key Points
Interactive
Quiz
Flashcards