The main general function of the market is allocation function. The financial market is related to money. It allocates the available supply of scarce resources to he prospective users. The financial market determines the rate of interest or the value of money that allocates scarce resources.
In general, investment means the purchase of building, machinery and equipments, stock and raw materials, semi-finished and finished goods. The different types of capital goods are produce goods and services. The fixed capital is required to invest in the fixed factors like building, machinery and equipments, where as working capital is required to invest in variable factors like wages, fuel, raw materials. Adequate finance is compulsory to make provision of such factors in appropriate quantity. The loans can be paid from the funds received by selling financial securities like share, debenture through the financial market.
In the financial market, the suppliers of money receive promissory note to be paid in future. The promissory notes are - stocks, bonds, cheque, insurance policy etc. The investors receive dividend, interest etc from financial promissory notes in future. In this way, financial market channelises saving into investment. This function is very essential for the sound economic system. Consequently, income declines and unemployment problem increases. The system of sound financial market makes the income of savers increase and the compulsion to take loan declines.
The main general functin of the market is allocation function. The financial market is related to money. It allocates the available supply of scarce resources to he prospective users. The financial market determines the rate of interest or the value of money that allocates scarce resources.In general, investment means the purchase of building, machinery and equipments, stock and raw materials, semi-finished and finished goods. The different types of capital goods are produce goods and services. The fixed capital is required to invest in the fixed factors like building, machinery and equipments, where as working capital is required to invest in variable factors like wages, fuel, raw materials. Adequate finance is compulsory to make provision of such factors in appropriate quantity. The loans can be paid from the funds received by selling financial securities like share, debenture through the financial market.
In the financial market, the suppliers of money receive promissory note to be paid in future. The promissory notes are - stocks, bonds, cheque, insurance policy etc. The investors receive dividend, interest etc from financial promissory notes in future. In this way, financial market channelises saving into investment. This function is very essential for the sound economic system. Consequently, income declines and unemployment problem increases. The system of sound financial market makes the income of savers increase and the compulsion to take loan declines.
In general, investment means the purchase of building, machinery and equipmentsm, stock and raw materials, semi-finished and fineshed goods. The different types of capital goods are produce goods and services. The fixed capitalis required to invest in the fixed factors lide building, machinery and equipments, where as working capital is required to invest in vareable factors like wages, fuel, raw materials. Adequate finance is compulsory to make provision of such factors in appropriate quantity. The loans can be paid from the funds received by selling financial securities like share, debenture through the financial market.
In the financial market, the suppliers of money receive promissory note to be paid in future. The promissory notes are - stocks, bonds, cheque, insurance policy etc. The investors receive dividend, interest etc from financial promisory notes in future. In this way, financial market channelises saving into investment. This function is very essental for the sound economic system. Consequently, income declines and unemployment problem increases. The system of sound financial market makes the income of savers increase and the compulsion to take loan dclines.
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