Question : Assertion: A financial market facilitates the exchange of financial assets.
Reason: Financial markets involve the trading of goods and services.
Option 1: Both assertion and reason are true, and the reason is the correct explanation of the assertion.
Option 2: Both assertion and reason are true, but the reason is not the correct explanation of the assertion.
Option 3: Assertion is true, but the reason is false.
Option 4: Assertion is false, but the reason is true.
Correct Answer:
Both assertion and reason are true, but the reason is not the correct explanation of the assertion.
Solution : The correct answer is (b) Both assertion and reason are true, but the reason is not the correct explanation of the assertion.
The assertion is true. A financial market facilitates the exchange of financial assets, which include stocks, bonds, derivatives, currencies, commodities, and other financial instruments.
The reason is not a correct explanation. Financial markets primarily involve the trading of financial assets, not goods and services. While financial assets represent ownership of goods and services, the core function of financial markets is the exchange of these financial instruments rather than the underlying goods and services themselves.
