Month: March 2022

These are markets that deal with securities that have been issued for the first time. The money flows directly from transferor (saver of money) to transferee (investing person). They facilitate capital formation. Economic Advantage of Primary Markets 1. Raising capital Read More …

Are also known as discount markets or acceptance financial institutions. This is a market for short term funds maturing in one year. Money market works through financial institutions. It facilitates transfer of capital between savers and users. The transfer can Read More …

These are markets for long term funds with maturity period of more than one year. E.g. markets for Financial instruments used here are debentures, terms, loans, bonds, warrants, preference shares, ordinary shares etc. The capital market serves as a way Read More …

1. Distribution of financial resources to the most productive units. Savings are transferred to economic units that have channels of alternative investments. (Link between buyers and sellers) 2. Allocation of savings to real investment. 3. Achieving real output in the Read More …

Financial markets refers to an elaborate system of the financial institution and intermediaries and arrangement put in place and developed to facilitate the transfer of funds from surplus economic units (savers) to deficit economic units (investors). Savers include individuals, small Read More …

The cost of capital of a project is the minimum required rate of return expected on funds committed to the project. It is the required rate of return by the providers of funds. Significance of cost of capital It is Read More …