Author: EconomicsLive

Capital Market

Capital Market The capital market is the market for medium and long term funds. The demand for long term funds comes from industry, agriculture and government. The supply of funds comes largely from individual savers, corporate savings, banks, insurance companies, financial institutions and government. #Structure of Capital Market Government Securities Market These securities are issued by …

Reforms in Indian Capital Market

Reforms in Indian Capital Market 1.Establishment of development financial institutions: For providing long-term funds to industry, Government of India established many financial institutions i.e., IFCI (1948), ICICI (1955), IDBI(1964), IRCI(1971), UTI(1964) etc. Moreover 14 major commercial banks were nationalised in 1969 and another6 banks were nationalised in 1980. 2. Legislative Measures : The government passed the …

Money and Financial Institutions

Books for Money and Financial Institutions The Economics of Money, Banking, and Financial Markets – Frederic S. Mishkin Foundations of Financial Markets and Institutions – Frank J. Fabozzi, Franco P. Modigliani, Frank J. Jones

Linear Programming [Word Problems]

Linear Programming Practice Questions A manufacturer produces two types of steel trunks. He has two machines A and B. The first type of trunk requires 3 hours on machine A and 3 hours on machine B. The second type requires 3 hours on machine A and 2 hours on machine B. Machine A and B work …

Features of Indian Money Market

1) Lack of integration The Indian money market is divided into sectors : organised and unorganised. As the two sectors are completely separate from each other, their financial operations are quite independent and whatever goes on in one sector has a small impact on the other. There is more of competition then co-operation and co-ordination between …

Reforms in Indian Money Market

The money market in India does not satisfy the criteria of developed money market. RBI the apex institutions of Indian money market, along with government had taken various measures to strengthen Indian money market over the years. Some of the reform measures are as follows: 1) Remitting the stamp duty In Aug 1989, the government the …

Asymmetric information : Adverse Selection and Moral Hazard

Asymmetric information It is one party’s insufficient and incomplete knowledge about the other party involved in the transaction to make accurate decision making. In other words  it means that one party has more better information then other when making decisions and transactions. It is sometime referred as information failure. Not only in financial market but almost …

Financial Institutions

Financial Institutions A financial institution is a company engaged in the business of dealing with monetary transactions, such as deposits, loans, investments and currency exchange. Financial institutions can be classified as banking and non- banking institutions. Business entities includes non financial and financial enterprises. Non financial enterprises manufacture products (eg. cars, steel, computers) and/or provide non-financial …

Financial Assets

Financial Assets Broadly an asset is any possession that has value in an exchange. Assets can be classified as tangible or intangible. A tangible asset is one whose value depends on particular physical properties for example building, land or machinery etc. Intangible assets by contrast represents legal claims to some future benefits. Their value bears no …

Says Law of Market

Says Law of Market The classical theory of employment is based on Say’s Law of market. According to this law, “ Supply creates it own demand”. J.B.Say a French Economist propounded this law and according to this law there can never be general over production and general unemployment. According to him, “ it is production which …

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