Short Answer Type‘Efficient functioning of stock exchange creates a conducive climate for active and growing primary market for new issues as well as for an active and healthy secondary market.’ In the light of this statement state any three functions of a stock exchange.
State any four factors which affects the requirements of working capital of a company.
Long Answer TypeYour Company has set up a food processing unit in Kashmir with a production capacity of 10,000 litres of apple juice per day. The company plans to market the apple juice in tetra pack of 100 millilitres. Design a label for the same.
Distinguish between money market and capital market on the basis of:
(a) Participants
(b) Instruments
(c) Safety and
(d) Expected return
| Basis | Capital Market | Money Market |
| Participants |
The participants in the capital market are financial institutions, banks, corporate entities, foreign investors and ordinary retail investors from public. |
Participation in the money market are institutional participants such as the RBI, banks, financial institutions etc. |
| Instruments | The main instruments traded in the capital market are – equity shares, debentures, bonds, preference shares etc. | The main instruments traded in the money market are short-term debt instruments such as T-bills, trade bills reports, commercial paper and certificates of deposit. |
| Safety | Capital market instruments are riskier both with respect to returns and principal repayment. | The money market is generally much safer with a minimum risk of default. This is due to the shorter duration of investing and also to financial soundness of the issuers. |
| Expected return | The investment in capital markets generally yield a higher return for investors than the money markets. The possibility of earnings is higher if the securities are held for a longer duration. | The investment in money market generally yield lesser return for investors than capital market. |
What do you mean by the price? Explain factors affecting price determination.
Or
There are number of factors which affect the fixation of the price of a product. Explain any four such factors.
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