Assertion: A financial market is a market for the creation and exchange of financial assets. Reasoning: Financial markets play an important role in the allocation of scarce resources in an economy.

Both Assertion (A) and reasoning (R) are correct and R is the correct explanation of A. Both Assertion (A) and reasoning (R) are correct and but R is not the correct explanation of A. Assertion (A) is true but Reasoning (R) is not correct. Assertion (A) is not true but Reasoning (R) is correct.

Both Assertion (A) and reasoning (R) are correct and but R is not the correct explanation of A.

A financial market is a market for the creation and exchange of financial assets. Financial markets exist wherever a financial transaction occurs. Financial transactions could be in the form of creation of financial assets such as the initial issue of shares and debentures by a firm or the purchase and sale of existing financial assets like equity shares, debentures and bonds. Financial markets play an important role in the allocation of scarce resources in an economy. Both Assertion (A) and reasoning (R) are correct and but R is not the correct explanation of A.