Question : Statement 1: Financial market provides a platform for the exchange of goods and services.
Statement 2: Financial market involves the buying and selling of financial assets.
Option 1: Statement 1 is true, and statement 2 is true.
Option 2: Statement 1 is true, but statement 2 is false.
Option 3: Statement 1 is false, and statement 2 is true.
Option 4: Statement 1 is false, and statement 2 is false.
Correct Answer: Statement 1 is false, and statement 2 is true.
Solution : The correct answer is (c) Statement 1 is false, and statement 2 is true.
Financial markets do not provide a platform for the exchange of goods and services in the traditional sense. Instead, they facilitate the buying and selling of financial assets, such as stocks, bonds, currencies, and derivatives.
Financial assets are instruments that represent ownership of a claim on future cash flows. For example, a stock represents ownership of a share in a company, and a bond represents a loan to a government or corporation.
Financial markets play an important role in the economy by providing a way for businesses to raise capital and for investors to make money. They also help to make the financial system more efficient and transparent. Financial markets are essential for the functioning of the modern economy. They provide a way for businesses to raise capital, for investors to make money, and for risks to be managed.
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