Class 12 Business Studies - PUNJAB
Financial Markets
The chapter 'Financial Markets' in Class 12 Business Studies for Punjab School Education Board (PSEB) explores the link between savers and investors. It covers the meaning, functions, and classification of financial markets into Money Market and Capital Market. Students will learn about instruments like Treasury Bills, Commercial Paper, and the operational differences between the Primary and Secondary markets (Stock Exchange), including SEBI's role as a regulator. This chapter is highly scoring in board exams and forms the backbone of commercial finance, frequently featuring direct theoretical questions and practical scenario-based problems.
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 borrow it.
Money Market
A market for short-term funds with maturity ranging from a day to up to one year, dealing in monetary assets like T-Bills and Call Money.
Capital Market
A market that deals in long-term funds (both debt and equity) exceeding one year, comprising both primary and secondary markets.
Primary Market
Also known as the new issue market, where securities are sold for the first time by the company to investors directly.
Secondary Market
Also 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 the interests of investors in securities and to promote the development of the securities market.
Important Formulas
Board Exam Info
In the Punjab (PSEB) Class 12 Business Studies board exam, this chapter typically carries around 6 to 8 marks. Questions usually include a mix of 1-mark objective questions, 3-4 mark short answer questions (such as differences between Capital and Money Market, or Primary and Secondary Market), and sometimes a 6-mark long answer or case study regarding the functions of SEBI or a Stock Exchange.
Frequently Asked Questions
What is the main difference between Money Market and Capital Market?
Money market deals in short-term instruments up to one year, while capital market deals in long-term instruments exceeding one year.
Can an existing share be sold in the Primary Market?
No, the primary market only deals with the issuance of new securities by companies to raise fresh capital. Existing shares are traded in the secondary market.
What is the primary role of SEBI in financial markets?
SEBI regulates the securities market, protects investor interests, prevents malpractices, and promotes the orderly development of the stock exchange.
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