Q.Write a short note on: Capital Market.

The capital market is the market for medium- and long-term funds, where shares, debentures and bonds are issued and traded; it has a primary market (new issues) and a secondary market (stock exchange), and it mobilises savings for long-term investment.

Capital Market

The financial market is divided into the money market (short-term funds) and the capital market (long-term funds). The capital market is the market that deals in medium-term and long-term funds — generally for a period of more than one year. This is a 2-mark AP Inter 2nd-year Commerce previous-year topic.

Key points:

• Deals in long-term funds and long-term securities such as equity shares, preference shares, debentures, bonds and government securities.
• Has two parts: the primary market (new issues market, where companies raise fresh capital by issuing new securities) and the secondary market (the stock exchange, where existing securities are bought and sold). …

The capital market is the market for long-term funds (over one year), dealing in shares, debentures and bonds, and is made up of the primary market (new issues) and the secondary market (stock exchange).

Capital Market

The capital market is that part of the financial market which deals in long-term funds — finance required for a period of more than one year. It links the suppliers of long-term savings (households, institutions) with the users of long-term funds (companies and the government) by trading in long-term securities such as equity shares, preference shares, debentures and bonds. The capital market is broadly divided into:

• Primary market (new issue market) – where fresh securities are issued to the public for the first time, and
• Secondary market (stock exchange) – where existing securities are bought and sold among investors. …