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
Question
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
Solution
The role of the Capital Market is not about facilitating short-term borrowing and lending, regulating interest rates, financing government budget deficits, or managing foreign exchange reserves. Instead, the Capital Market is primarily concerned with raising long-term funds. It acts as a link between savers and investors, providing a platform where savings are mobilized and channeled to productive uses. Therefore, none of the options A, B, C, or D correctly indicates the role of the Capital Market.
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