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 true, and statement 2 is true.
Solution : The correct answer is (a) Statement 1 is true, and statement 2 is true.
Statement 1 is true. Financial markets are platforms where various entities come together to exchange financial instruments (like stocks, bonds, currencies, derivatives) and services related to those financial instruments. These markets facilitate the allocation of capital and resources in the economy.
Statement 2 is true. Financial markets are primarily concerned with the buying and selling of financial assets such as stocks, bonds, currencies, commodities, and derivatives. Participants engage in transactions to buy or sell these assets, enabling price discovery and liquidity in the market.
