Samacheer Kalvi 12th Commerce Notes Chapter 4 Introduction to Financial Markets
→ Financial Market facilitates business firms as well as governments to raise the needed funds by issuing and selling different instruments.
→ With the help of Financial Market, all kinds of business, Government and the financial institutions can get financial assistance in terms of both short term finance and long term finance.
→ The Indian financial system can be broadly classified into organized sector and unorganized sector. Organized Sector consist of Regulators Financial Institutions, Financial Markets and Financial Services. The Unorganized Sector consists of Money Lenders, Indigenous Bankers etc.
→ A Market where in financial instruments (claims, assets and securities) are traded is known as a “Financial Market”. Financial Market transactions may be place either at a specific place or location. Eg: Stock Exchange.
→ Financial Market leads to the overall economic development.
→ Financial Markets can be classified in different ways.
→ Financial Claim, Maturity, Time of Issue of Financial Claim, Time of Delivery and Organizational Structure of Financial Market.
→ Financial Market plays a key role in arrahging investment of funds. It contribute the development of the entrepreneurial class.
→ To accelerated growth of Industrial and economic development of a Country and raising the standard of living. (Society’s Well-being)
→ A financial market renders the following functions
- Intermediary functions and
- Financial functions
→ A financial asset is one which is used for production or consumption or for further creation of assets. Financial assets can be classified differently under different circumstances.
- Marketable Assets,
- Non-Marketable Assets.