Question : Which of the following statement is correct?
Statement 1: In the capital market transactions are made in the short term securities
Statement 2: It is the nature of the capital market to established balance between the supply and the demand side.
Option 1: Both are true
Option 2: Both are false
Option 3: Statement 1 is true and statement 2 is false.
Option 4: Statement 1 is false and statement 2 is true.
Correct Answer:
Statement 1 is false and statement 2 is true.
Solution : In the capital market transactions are made in the long term securities. It is the nature of the capital market to satisfy the long term financial needs of the Government and industrial sector. It is the nature of the capital market to established the balance between the supply and demand side. The capital market helps capital formation. The increase in the investments in the country is called capital formation. The chief function of the capital market is to provide a platform for the sale and purchase of securities.
Hence, option D is correct.
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