Introduction of Financial Market Video Lecture | Business Studies (BST) Class 12 - Commerce

hello students today we are going to
start with a new chapter that is a
financial market chapter 10 so we'll
discuss that what financial market is
right a financial market is a market for
the creation and exchange of financial
assets so it is a market where we create
and we exchange financial assets right
now what financial asset is financial
asset are the shares debentures or any
kind of securities right so it is a
market where we create such assets and
we exchange such assets creation of
financial assets means we show shares
debentures or any other securities in
financial market how we exchange these
financial assets we purchase and sale of
existing shares debentures or securities
so for these two purposes there are two
main players you can say or they are
main two sectors which participate in
you know the financial market as a
buyers and sellers you can say the first
one is the house horse and the second
one is the business firms right these
households they have the funds with them
they have you know ferns with them
surplus funds with them and they are
called savers right so households they
do saving fine that is why they are
called savers and the business forms or
you can say the borrower's fine they
invest the fund and they are called as
investors
okay now financial market as a primary
function that is called the allocative
function financial market has an
allocated function and what allocative
function is allocated function means
that this financial market it lengths
the savers and investors by
mobilizing the funds between them so
this financial market it plays allocate
the function right by linking means it
financial market brings together the
savers and the investors together to
mobilize funds right means the savers
they save money in the banks and the you
know the borrowers they borrow money and
again they become investors they invest
money fine to provide profit to these
savers fine this one more definition
what is financial intermediation it is
the process by which allocation of funds
is done right how these investors they
invest you know money of the savers in
different funds how they allocate that
process is called the financial
intermediation or the allocation of
funds fine now will you not discuss in
detail that how these two main sectors
in the economy they operate or they work
fine we have business firms first and we
have household savers they are the
savers they have surplus money with them
they have surplus find with them that is
why they are called surplus units okay
and the second one is the second sector
that is called the business forms on the
panniers deficit units or you can say
the borrower's fine so what do they do
they these household savers they provide
right or they save the surplus fund in
the banks banks generally induce these
household savers by providing good rate
of interest
fine so they induce their savings they
are invite them when the household
savers not to keep their money idle at
their homes but to invest that into the
back and to earn good profit as interest
right so
they save money in banks and what bank
does banks they provide the money which
they receive from these household savers
they provide that money to these
business firms because these business
firms they need money they need money
and they are called the deficit unit
because they require more money fine so
that is why they are called a deficit
unit so what bank is doing Bank is
actually receiving money from the
surplus unit and allocating or you can
say giving lending that amount to the
deficit unit that is called the business
firm or the entrepreneurs fine and you
will see that in what banks they are
doing actually banks are helping these
business firms or the entrepreneurs to
increase the production of goods and
services fine how because these business
forms they require money to purchase
real assets fines real assets on plant
machinery land right at the same time
they invest that borrowed amount fine to
increase their wealth fine so this is
the one function the second function is
these forms first they raised money
through these banks first financial
institutions second they raise money or
the various forms of the deficit unit
they raise money by issuing shares or
debentures or any kind of security in
the financial market right they raise
money by issuing shares debentures in
the financial market again these two
players they are there right there also
there right these households savers not
only they invest their money in bank but
they also invest their money in
purchasing the securities shares or the
ventures so these business units they
are fetching money through the household
savers by two different mediums
you