Question

QUE// DISCUSS THE FOLLOWING FINANCIAL MARKET TERMS

a) . Liquidity b) Capital Market c) Stock d) Bond Market e) Market Capitalization f) Money Market e) Treasury Bills f) Commercial paper and Bank Transaction Account

Answer 1

Liquidity

Liquidity refers to the degree of a asset that can covert in to money or money equalents without influencing the market price.

Cash is the most liquid form of asset.

Capital market

Capital market is a financial market that mostly deal with shares , bond and other capital structures that are bought and sold.

newyork stock exchange is an example of capital market

Stock

The stock represent the ownership of a company, a person who buys stock of a company means he or she is the stakeholder of the company ,it is also called share , and collection of shares is called stock in common

Bond market

It is a capital market in which people buy and sell debt securities is called secondary market, people issue new debt is called primary market .it will be mostly in bond.

Federal government bond , municipal bonds are examples of bond market.

Market capitalization

Market capitalization is called market cap, it is calculated by total number of shares multiply with market value of one share

Example 1000 shares is in the company and the market value of 1 share is 10 then the market cap is 10000

Money market

Money market is mainly based on short term loans and advances for a period less than a year

Interbank loans is an example of money market

Treasury bills

A short-dated UK or US government security, yielding no interest but issued at discount on its redemption price

Commercial paper

it Is a insecure promissory notes issued by companies for a short term. Payroll is the example of commercial paper.

Bank transaction account

A bank transaction account is a account in a bank that helps to do the money transaction with third parties.

Savings account, current account is the forms of bank accounts.