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A capital market is a financial market in which long-term debt (over a year) or equity-backed securities are bought and sold, [1] in contrast to a money market where short-term debt is bought and sold. Capital markets channel the wealth of savers to those who can put it to long-term productive use, such as companies or governments making long ...
Financial instruments are monetary contracts between parties. They can be created, traded, modified and settled. They can be cash (currency), evidence of an ownership interest in an entity or a contractual right to receive or deliver in the form of currency (forex); debt ( bonds, loans ); equity ( shares ); or derivatives ( options, futures ...
The capital market may be further divided into (a) industrial securities market (b) Govt. securities market and (c) long-term loans market. Equity markets: A market where ownership of securities are issued and subscribed is known as equity market. An example of a secondary equity market for shares is the New York (NYSE) stock exchange.
A securities market is a system of interconnection between all participants (professional and nonprofessional) that provides effective conditions: to attract new capital by means of issuing new security (securitization of debt) to transfer real asset into financial asset. to invest money for short or long term periods with the aim of deriving ...
The instruments bear differing maturities, currencies, credit risks, and structures. [2] A market can be described as a money market if it is composed of highly liquid, short-term assets. Money market funds typically invest in government securities, certificates of deposit, commercial paper of companies, and other highly liquid, low-risk ...
Asset classes. In finance, an asset class is a group of financial instruments that have similar financial characteristics and behave similarly in the marketplace. We can often break these instruments into those having to do with real assets and those having to do with financial assets. Often, assets within the same asset class are subject to ...
An "asset-backed security" is used as an umbrella term for a type of security backed by a pool of assets—including collateralized debt obligations and mortgage-backed securities (MBS) (Example: "The capital market in which asset-backed securities are issued and traded is composed of three main categories: ABS, MBS and CDOs".
The derivatives market is the financial market for derivatives - financial instruments like futures contracts or options - which are derived from other forms of assets . The market can be divided into two, that for exchange-traded derivatives and that for over-the-counter derivatives. The legal nature of these products is very different, as ...