This presentation would cover slides on the financial market, various types of financial market. Money market and the instruments of money market like the call money, treasury bills, certificate of deposits, commercial papers.

1. FINANCIAL MARKET

2. AGENDA
• Introduction to Financial Market
• Types of Financial Market
• Money Market
• Instruments of money market-
• Call Money
• Commercial Papers
• Treasury Bills
• Certificate of deposits

3. Introduction to Financial
Market
• Financial market is a market that involves trading of financial assets
like equities, bonds, currencies etc.
• Establishes price of financial assets with the presence of forces of
demand and supply for these assets
• It provides liquidity to financial assets as they could be negotiated
and transferred to raise funds from investors with different time
horizons
• It helps saving the cost of transaction like cost involved in searching
for the asset, gathering information, time involved in locating the
customer
• It acts as a pool between savers, investors and borrowers
• It involves various parties like Govt., Banks, Financial Institutions,
Insurance Companies, Mutual funds

4. Types of Financial Market
• Money Market (The market where financial assets with short term
maturities are traded)
• Capital Market (The market where long term securities are traded)-
• Stock Market(Deals with equity trading)
• Bond Market(Deals with bond trading)
• Forex Market (The foreign exchange market is the market in which
participants are able to buy, sell, exchange and speculate on currencies)
• Derivatives Market (The derivative market is the financial market for
derivatives i.e. the financial instruments like future contracts or options
which are derived from other form of underlying assets like equity, currency
etc)
• Commodity Market (The market that trade in primary products like
agricultural products, gold, mines, oil)

5. Money Market
• Trades in financial assets with short-term maturities
• The maturity lies upto1year
• Regulator of money market in India – Reserve Bank of India
• The money market helps industries secure short-term loans to meet
their working capital requirement through the short-term finance
bills, commercial papers
• Helps in earning income along with liquidity maintenance

6. Instruments of Money
Market
1. Call Money- It is a method by which commercial banks borrow from
each other to maintain the cash reserve ratio fixed by RBI
• The interest rate paid on call money is termed as call rate, Recent
call rate is between 6.5-7%
• Inter-bank transaction to cover the shortage of fund
with a maturity of 1-2 days.
2. Treasury Bill – Issued by RBI on behalf of govt. to cover the deficit
balance or to control the money supply in market
• This is issued at discount and repayable at par value
• Negotiable and freely transferrable
• Issued in three types of T-bills (91-days, 182-days, 364-days)
• 6-7% return

7. • Commercial Paper- Unsecured promissory note
• Issued by corporates to generate fund
• Maturity period is upto 12 months
• Organizations can either directly issue or through the banks
• Mostly banks and financial institutions purchase these promissory
notes and provide funds
• Certificate of Deposits- Banks issues these certificates or
document of title to the depositors who deposits their money for
longer period of time, these are mostly the companies
• Normally issued in the multiples of 1 lakhs
• Maturity period is upto 12 months

8. Thank You for Watching
 Like
 Subscribe
 Share