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Direct Questions - Financial Market | Business Studies (BST) Class 12 - Commerce PDF Download

Direct Questions:
 1.What do you mean by Financial market
 2.Explain the term Financial intermediation
 3.Show the process of allocation of funds with help of diagram
 4 Discuss functions of Financial market
 5 Differentiate between Capital and money market
 6.Explain five money market instruments
 7.What do you mean by ‘Bridge financing’ ?
 8.What do you mean by Zero coupon Bonds and why?
 9.Name the two types of Capital market and differentiate between them.
10.Define Stock exchange
11.Give meaning of Stock exchange
12 Write a brief note on Stock exchanges in India
13.Discuss functions of Stock exchange
14 Explain trading procedure on a stock exchange
15.What do you mean by Depository services
16.What are services offered by Depository
17 What are benefits of  Depository services
18 What do you mean by Dematerialisation  of securities
19.What do you mean by Depositary and Depositary Participant ?
20.What do you mean by Demat Account
21. What are advantages of Demat Account
22.What is reason for establishment of SEBI
23.What are objectives of SEBI
24 What are functions performed by SEBI

 

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FAQs on Direct Questions - Financial Market - Business Studies (BST) Class 12 - Commerce

1. What is financial market commerce?
Ans. Financial market commerce refers to the buying and selling of financial instruments, such as stocks, bonds, commodities, and currencies, in order to make a profit. It involves various participants, including individuals, institutional investors, banks, and brokers, who trade these assets on organized exchanges or over-the-counter markets.
2. How does financial market commerce work?
Ans. Financial market commerce works through a network of buyers and sellers who interact in various markets, such as stock exchanges or forex markets. Buyers place orders to purchase financial instruments at a certain price, while sellers offer their assets for sale. When a buyer and seller agree on a price, a transaction occurs and the asset is transferred. This process is facilitated by financial intermediaries, such as brokers or electronic trading platforms.
3. What are the main types of financial instruments traded in financial market commerce?
Ans. The main types of financial instruments traded in financial market commerce include stocks, bonds, derivatives, currencies, and commodities. Stocks represent ownership in a company, bonds are debt instruments issued by governments or corporations, derivatives derive their value from an underlying asset, currencies are traded in the forex market, and commodities include physical goods like gold, oil, or agricultural products.
4. What factors influence financial market commerce?
Ans. Several factors influence financial market commerce, such as economic indicators, geopolitical events, central bank policies, corporate earnings, and investor sentiment. Economic indicators like GDP growth, inflation rates, or employment data can impact market movements. Geopolitical events, such as wars or trade disputes, can create uncertainties. Central bank policies, like interest rate changes, affect borrowing costs. Corporate earnings reports can influence stock prices. Finally, investor sentiment, which reflects the overall mood of market participants, can drive buying or selling decisions.
5. What are the risks associated with financial market commerce?
Ans. Financial market commerce involves various risks, including market risk, liquidity risk, credit risk, and operational risk. Market risk refers to the possibility of losing money due to adverse price movements in financial instruments. Liquidity risk arises when it becomes difficult to buy or sell an asset without causing a significant price impact. Credit risk is the risk of default by a borrower or counterparty. Operational risk includes risks related to technology failures, fraud, or regulatory compliance. Traders and investors need to carefully manage these risks to protect their investments.
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