CBSE 2025, Set 1

Question

'Tech Work' an Artificial Intelligence (AI) startup started in 2024. It was earning good profits. It wanted to expand its business and for its research and development, it required 100 crores. The Chief Executive Officer of 'Tech Work' consulted the Finance Manager who suggested that there is a market which facilitates transfer of investible funds from savers to entrepreneurs seeking to establish new enterprises or expand existing ones through the issue of securities. The management of 'Tech Work' decided to raise funds from the investors by issuing equity shares @200 per share for the first time.

(i) Name the type of capital market through which 'Tech Work' decided to raise funds for its expansion.

(ii) State three features of the market identified in (i) above.

(i) Name the type of capital market through which 'Tech Work' decided to raise funds for its expansion.

(ii) State three features of the market identified in (i) above.

Edvaya · Accepted Answer

The correct answer is Subjective. **(i) Type of Capital Market:** The type of capital market identified is the **Primary Market** (or New Issue Market), as the company is issuing equity shares for the first time. **(ii) Features of the Primary Market (Any three):** 1. **Market for New Securities:** It is the market where new securities are issued to investors for the very first time. 2. **No Fixed Geographical Location:** It does not have a specific physical location or structural setup. Transactions take place through various institutions, brokers, and banks. 3. **Promotes Capital Formation:** It facilitates the transfer of funds from savers directly to entrepreneurs, thereby contributing directly to the capital formation of the country. 4. **Comes before Secondary Market:** Transactions in the primary market happen first; only then do the securities get traded in the secondary market.

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