Q.What is a financial market? Give its definition.

Every economy has savers with surplus funds and borrowers who need funds, and a financial market is simply the mechanism that connects the two.

A financial market is a market, or institutional arrangement, where financial assets (financial instruments/securities) such as shares, debentures, bonds and treasury bills are created, issued, bought and sold. It brings together surplus units (savers/investors who have funds beyond their immediate needs) and deficit units (borrowers/issuers who need funds for investment or expenditure), so that the economy's savings can be transformed into productive investment.

Describing a financial market as only "the stock market" — the stock market (secondary market for equities) is just one part of the much broader financial market, which also includes the money market, the primary market, and the debt market.