Based on following case study, answer the question.

Financial Market are classified on the basis of the maturity of financial Instruments traded in them. Instruments with a maturity of less than one year are traded in money market while instruments with longer maturity are traded in Capital market. Instruments with a maturity of short term/ period upto one year are close substitutes for money. While long term funds market, direct savings of the community into their most productive use leading to growth and development of the economy.

Select the market in which shares are traded :

Capital Market

The correct answer is option (1)- Capital Market.

Shares are traded in the Capital Market.

Shares represent ownership in a company and are a form of equity financing, often used to raise long-term funds for business operations and expansion. These are traded in capital market.

Investment in the capital market i.e. securities does not necessarily require a huge financial outlay. The value of units of securities is generally low i.e. Rs 10, Rs 100 and so is the case with minimum trading lot of shares which is kept small i.e. 5, 50, 100 or so. This helps individuals with small savings to subscribe to these securities.