Class 12 Business Studies - TELANGANA
Financial Markets
The chapter 'Financial Markets' in Class 12 Business Studies for Telangana (TSBSE) students explores the crucial link between savers and investors. It covers the classification of financial markets into Money Market and Capital Market, detailing instruments like Treasury Bills, Commercial Paper, and Equity Shares. Students learn about the role of the Reserve Bank of India (RBI) and the Securities and Exchange Board of India (SEBI) in regulating these markets. Understanding primary and secondary markets, stock exchange functions, and trading procedures is essential, as this chapter frequently features high-weightage direct and application-based questions in the board exams.
Start Learning FreeKey Concepts
Financial Market
A market that creates and exchanges financial assets, bridging the gap between those who have surplus funds (savers) and those who need them (investors).
Money Market
A market for short-term funds with maturity periods up to one year, dealing in monetary assets like Treasury Bills, Call Money, and Commercial Paper.
Capital Market
A market that meets the long-term financial requirements of business enterprises through instruments like shares, debentures, and bonds, comprising primary and secondary 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 statutory 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 Telangana (TSBSE) Class 12 Business Studies board exams, Financial Markets typically carries around 8 to 12 marks. Questions usually include very short answer questions (2 marks), short answer questions (4 marks), and essay or long answer questions (8 marks), often focusing on the distinction between money and capital markets, primary and secondary markets, or functions of SEBI and stock exchanges.
Frequently Asked Questions
What is the difference between primary market and secondary market?
In the primary market, companies issue new securities directly to investors to raise fresh capital. In the secondary market, existing securities are traded among investors, providing liquidity without involving the issuing company.
What are the main instruments traded in the money market?
Major money market instruments include Treasury Bills (T-Bills), Commercial Paper, Certificate of Deposit, Call Money, and Commercial Bills.
What are the primary functions of SEBI?
SEBI's main functions are protective (preventing unfair trade practices), developmental (training intermediaries and promoting market activities), and regulatory (framing rules, regulations, and code of conduct for financial intermediaries).
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