What is capital market?
The capital market is a market for long-term financial investments. This includes both debt and equity instruments. The purpose of the capital market is to provide a means for companies to raise money to finance their operations and expand their businesses. The capital market is also a source of revenue for investors. They can earn interest on their investments, or they can sell their investments for a profit. Capital markets are important because they provide a way for businesses to raise money and for investors to earn a return on their investment.
Types of capital market
Capital markets can be either primary or secondary. In a primary market, securities are issued for the first time. In a secondary market, they are traded after being issued. The most well-known capital markets are the stock market and bond market.
Capital Market Instruments
Capital market instruments are used to raise capital for businesses and governments. They include stocks, bonds, and other securities. Stocks represent ownership in a company. When you buy a stock, you become a shareholder. Bonds are loans that must be repaid with interest. Other securities include options, futures, and derivatives. Capital markets provide liquidity for these securities. This means that they can be bought and sold quickly and at a fair price.
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