Class 12 Business Studies - WEST-BENGAL
Financial Markets
The chapter 'Financial Markets' in Class 12 Business Studies for West Bengal (WBBSE) students explores the crucial link between savers and investors. It covers the classification of financial markets into Money Market and Capital Market, highlighting instruments like Treasury Bills, Commercial Paper, and Equity shares. You will learn about the functions of financial markets, the role of the Reserve Bank of India (RBI) in the money market, and the working of stock exchanges, particularly the Securities and Exchange Board of India (SEBI) as a regulatory body. This is a high-scoring theoretical chapter frequently tested through direct and application-based questions in board exams.
Start Learning FreeKey Concepts
Financial Market
A mechanism that brings together buyers and sellers to trade financial assets such as shares, debentures, and bonds.
Money Market
A market for short-term funds with a maturity period of up to one year, catering to the working capital requirements of businesses.
Capital Market
A market for 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 the issuance of new securities directly by the company to investors.
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 investors' interests and promote the orderly development of the securities market.
Important Formulas
Board Exam Info
In the West Bengal Council of Higher Secondary Education (WBBSE) Class 12 Business Studies exams, this chapter typically carries around 6-8 marks. Questions generally include multiple-choice questions (MCQs), very short answer questions (VSA), and 4 to 5-mark long questions distinguishing between Money Market and Capital Market or Primary and Secondary Markets, along with functions of SEBI.
Frequently Asked Questions
What is the main difference between Money Market and Capital Market?
Money market deals in short-term funds (up to one year) and has low risk, whereas capital market deals in medium and long-term funds with relatively higher risk and return.
What are the primary functions of a Stock Exchange?
Stock exchanges provide liquidity and marketability to existing securities, help in fair price determination, ensure safety of transactions, and contribute to economic growth by channelizing savings into productive investments.
Why is SEBI considered necessary for the financial market?
SEBI protects the interests of retail investors, prevents malpractices and fraudulent trading practices, and regulates the stock exchanges to ensure transparency and healthy growth of the capital market.
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