27.The primary objective of the capital market? A. Profit maximization for investors B. Facilitating the transfer of funds from savers to investors C. Short-term capital gains D. Promoting speculative trading
Question
27.The primary objective of the capital market? A. Profit maximization for investors B. Facilitating the transfer of funds from savers to investors C. Short-term capital gains D. Promoting speculative trading
Solution
The primary objective of the capital market is B. Facilitating the transfer of funds from savers to investors.
Capital markets are platforms where savings and investments are channeled between the suppliers who have capital and those who are in need of capital. The entities that have capital include retail and institutional investors while those who seek capital are businesses, governments, and people.
These markets help channel wealth from savers to the individuals who have productive investment opportunities. Thus, the primary objective of the capital market is to facilitate the transfer of funds from savers to investors.
Similar Questions
Which of the following is an objective of the Capital Market? A. Ensuring stability in the financial system B. Promoting international trade C. Providing short-term financing to businesses D. Mobilizing long-term savings for investment
13.Which function of the capital market involves the creation of a secondary market for existing securities? A. Mobilization of savings B. Price determination C. Facilitating company growth D. Risk mitigation
one of the key functions of the capital market in the economy? A. Encouraging hoarding of financial resources B. Creating monopolistic control over financial assets C. Allocating financial resources to their most productive uses D. Restricting access to investment opportunities
Which one of the following indicates the role of Capital Market? A. Facilitating short-term borrowing and lending B. Regulating interest rates C. Financing government budget deficits D. Managing foreign exchange reserves
Money markets and capital markets
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