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Business Studies · 2022 · 5 marks
CBSE 2022 · Region 2 · Set 3 · Q10
What is meant by ‘Financial Market’? State any four
functions of ‘Financial Market’.
Marking-scheme solution
Financial Market is the market for the creation and
exchange of financial assets.
Functions of financial market:
(i)
It mobilises savings and channelises them into most
productive use by facilitating transfer of savings from savers to
investors.
(ii)
It facilitates price discovery for financial assets by
interaction of forces of demand and supply.
(iii)
It provides liquidity to financial assets as the securities can
be easily converted into cash.
(iv)
Reduces cost of transactions as it helps to save time, effort
and money that both buyers and sellers of a financial asset
would have to otherwise spend to try and find each other.
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CBSE Class 12 Business Studies past-paper question from the 2022board exam, with the answer as CBSE’s own marking scheme gives it. Where our answers come from.