Question

SOME IMPORTANT TRUE AND FALSE WITH REASON:
Capital market and security market are one and the same.

• A. True
• B. False

Answer 1

The correct option is B False

This statement is 'False' because of the following reasons:
(i) A capital market is an organised market for effective and efficient mobilisation of money, capital or investable funds from numerous investors an dfor their transfer or distribution to those who are need of money to finance their business either in the private sector or in the public sector of our economy.
(ii) The capital market is directly responsible for two activities:
(a) mobilisation of national savings for economic development and
(b) mobilisation and import of foreign capital and foreign investment.
(iii) Capital market is a broad term which includes primary markets, secondary markets, term lending institutions, banks, investors etc., who are engaged in providing long term capital to the industrial sector.
(iv) Security market is an organised market place where the securities such as equity shares, preferences shares, bonds, debentures of companies and government bonds are traded.
(v) The business houses come to security market to raise long term funds.
(vi) Therefore, capital market and security market are not one and the same.