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Capital Market - 1 Video Lecture | Crash course for UPSC (Hindi)

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FAQs on Capital Market - 1 Video Lecture - Crash course for UPSC (Hindi)

1. What is a capital market?
Ans. A capital market refers to a financial market where individuals and institutions trade financial securities such as stocks, bonds, and derivatives. It allows companies, governments, and individuals to raise funds for investment or to meet their financial needs.
2. How does the capital market function?
Ans. The capital market functions by providing a platform for the buying and selling of financial instruments such as stocks and bonds. Investors can purchase these securities from issuers or other investors, and their prices are determined by supply and demand dynamics. The capital market also provides a mechanism for companies and governments to raise capital by issuing new securities.
3. What are the different types of participants in the capital market?
Ans. The capital market involves various participants, including individual investors, institutional investors such as mutual funds and pension funds, investment banks, stock exchanges, and regulatory bodies. Each participant plays a specific role in facilitating the trading and functioning of the capital market.
4. What are the advantages of investing in the capital market?
Ans. Investing in the capital market offers several advantages. Firstly, it allows individuals and institutions to earn returns on their investments through capital appreciation and dividends. Secondly, it provides opportunities for diversification, enabling investors to spread their risk across different asset classes. Additionally, the capital market promotes economic growth by facilitating capital formation and allocation.
5. How does the capital market contribute to the overall economy?
Ans. The capital market plays a crucial role in the overall economy. It enables companies and governments to raise funds for expansion, research and development, and infrastructure projects. This, in turn, stimulates economic growth and job creation. The capital market also provides a platform for efficient allocation of capital, directing funds towards productive investments and fostering innovation and entrepreneurship.
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