FINANCIAL MARKET y Market for creation and exchange of financial assets. . Financial markets also helps in price discovery and provides liquidity to financial assets. It helps in mobilization and channelizing the savings into most productive uses.



.MONEY MARKET y The money market is a market for short term funds which deals in monetary assets whose period of maturity is up to one year. It is a market where low risk unsecured & short term debt instrument that are highly liquid are issued and actively traded everyday.

PARTICIPANT y Reserve Bank Of India y Commercial Banks y Non Banking Finance Companies y State Government y Large Corporate House y Mutual funds .

INSTRUMENTS y Treasury bill y Commercial Bill y Commercial paper y Certificate of deposit y Call money .

.CAPITAL MARKET y The term capital market refers to all facilities and institutional arrangement through which long term funds both debt and equity are raised and invested.

PARTICIPANT y Financial institutions y Banks y Corporate entities y Foreign investor y Ordinary retail investor .

. The essential function of primary market is to facilitate the transfer of investible funds from savers to entrepreneurs.PRIMARY MARKET y Primary market deals with new securities which were not previously tradable to the public.

It is a market for purchase and sale of existing securities.SECONDARY MARKET y This market is also known as stock market or stock exchange. It help existing investors to disinvest and fresh investors to enter the market .

A COMPARISON PRIMARY MARKET NEW ISSUE MARKET SECONDARY MARKET STOCK SXCHANGE Sale of securities by new companies  Ownership is exchanged between company & investor y Prices are determined by the management of the company  There is no fixed geographical location y y Trading of existing shares only y Exchange is in between investors y Prices are determined by the demand and supply for the securities y Located at specified places .PRIMARY & SECONDARY MARKETS.

The process of economic development is facilitated by well developed functioning capital market.CONCLUSION y An ideal capital market is one where finance is available at reasonable cost minimize transaction cost and capital most productively. .


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