“Money Market is essentially a Mar | Class 12 Business Studies Chapter Financial Markets, Financial Markets NCERT Solutions

Welcome to the NCERT Solutions for Class 12 Business Studies - Chapter Financial Markets. This page offers a step-by-step solution to the specific question from Exercise 2, Question 2: . With detailed answers and explanations for each chapter, students can strengthen their understanding and prepare confidently for exams. Ideal for CBSE and other board students, this resource will simplify your study experience.

Question 2:

“Money Market is essentially a Market for short term funds.” Discuss.

Answer:

Money market is a market where transactions are made in short-term securities or it is meant for those securities where the payment period is upto one year. Since, their maturity period is very short, they are also termed as near money. These securities include call money, treasury bills, commercial bills, certificate of deposit, commercial paper, etc. Short-term financial instruments satisfy the requirement of short-term or working capital needs of commercial establishments.

Features of Money Market are:

  1. The volume of transaction in money market is large that is why it is also called Wholesale market.
  2. The participants of money market are RBI, commercial banks, financial institutions and finance companies.
  3. Impersonal relationship is established among the participants in a money market.
  4. Money markets are highly liquid and have an arrangement for providing liquidity, which is provided by Discount and Finance Houses of India (DFHI).


Study Tips for Answering NCERT Questions:

NCERT questions are designed to test your understanding of the concepts and theories discussed in the chapter. Here are some tips to help you answer NCERT questions effectively:

  • Read the question carefully and focus on the core concept being asked.
  • Reference examples and data from the chapter when answering questions about Financial Markets.
  • Review previous year question papers to get an idea of how such questions may be framed in exams.
  • Practice answering questions within the time limit to improve your speed and accuracy.
  • Discuss your answers with your teachers or peers to get feedback and improve your understanding.

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Welcome to the NCERT Solutions for Class 12 Business Studies - Chapter . This page offers a step-by-step solution to the specific question from Excercise 2 , Question 2: “Money Market is essentially a Market for short term funds.” Discuss.....