Given below are two statements:

Statement I : Capital market plays an important role in mobilising resources and diverting them in productive channels.

Statement II : Capital market is a market where buyers and sellers engage in trade of financial securities like bonds, stocks, etc.

In the light of the above statements, choose the correct answer from the options given below:

The correct answer is Both Statement I and Statement II are true

Important Points Statement I : Capital market plays an important role in mobilising resources and diverting them in productive channels.

This statement is true because

• Capital market plays an important role in mobilising resources, and diverting them in productive channels.
• In this way, it facilitates and promotes the process of economic growth in the country.

Statement II : Capital market is a market where buyers and sellers engage in trade of financial securities like bonds, stocks, etc.

This statement is true

• Capital market is a market where buyers and sellers engage in trade of financial securities like bonds, socks, etc.
• The buying/selling is undertaken by participants such as individuals and institutions.
• Generally, this market trades mostly in long term securities.