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From the given options, which of the following is NOT included in the financial sector?
1. Trade market
2. Foreign exchange market
3. Commercial banks
4. Investment banks

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Correct Answer - Option 1 : Trade market

The trade market is NOT included in the financial sector.

Financial Market:

Financial markets act as an intermediary between lenders and borrowers. Financial markets help in smoothening out the capitalist economy. It allocates the resources between the lenders and borrowers. The markets make it easy for buyers and sellers to trade their financial holdings. The following are a part of the financial markets:

  1. Stock Markets- These are venues where companies list their shares and are bought and sold by traders and investors. Stock markets, or equities markets, are used by companies to raise capital via an initial public offering (IPO), with shares subsequently traded among various buyers and sellers in what is known as a secondary market.
  2. Over-the-counter market- An over-the-counter (OTC) market is a decentralized market, it does not have physical locations, and trading is conducted electronically—in which market participants trade securities directly between two parties without a broker.
  3. Bond Markets- Bonds are issued by corporations as well as by municipalities, states, and sovereign governments to finance projects and operations. The bond market sells securities such as notes and bills issued by the United States Treasury, for example. The bond market also is called the debit, credit, or fixed-income market.
  4. Money Markets- The money markets trade in products with highly liquid short-term maturities (of less than one year) and are characterized by a high degree of safety and a relatively low return in interest.
  5. Derivatives Markets- A derivatives market trades in futures and options contracts, and other advanced financial products, that derive their value from underlying instruments like bonds, commodities, currencies, interest rates, market indexes, and stocks. 
  6. Forex Markets/Foreign Exchange Market- The market in which participants can buy, sell, hedge, and speculate on the exchange rates between currency pairs. The forex market is the most liquid market in the world, as cash is the most liquid of assets.
  7. Commodity Markets- Commodities markets are venues where producers and consumers meet to exchange physical commodities such as agricultural products (e.g., corn, livestock, soybeans), energy products (oil, gas, carbon credits), precious metals (gold, silver, platinum), or "soft" commodities (such as cotton, coffee, and sugar). These are known as spot commodity markets, where physical goods are exchanged for money.
  8. Cryptocurrency markets- Cryptocurrency tokens are available and trade globally across a patchwork of independent online crypto exchanges. These exchanges host digital wallets for traders to swap one cryptocurrency for another, or for fiat monies such as dollars or euros.

  • Note that there is no such market called a Trade market existing in the Financial Market sector.

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