Q.What is Capital Market?

Participants in the capital market include all of the listed groups — option (d).

The capital market is the market for long-term funds. It involves a wide range of players who supply or demand long-term capital:

• Corporates — issue shares and debentures to raise long-term funds.
• Financial institutions — banks, mutual funds, insurance companies that invest and lend. …

The capital market is the market for long-term finance (funds with a maturity of more than one year), so the correct option is (a) Long term finance.

In the Tamil Nadu HSC Commerce syllabus, the financial market is split by the maturity of the funds it deals in:

• Money market handles short-term funds — instruments maturing within one year (treasury bills, commercial paper, call money).
• Capital market handles long-term funds — instruments with a maturity of more than one year, such as equity shares, preference shares, debentures and bonds. …

The capital market is a market for long-term finance, so the answer is (a).

The capital market is that part of the financial market which deals in medium- and long-term funds, i.e. funds required for more than one year. It brings together those who need long-term capital (companies, governments) and those who supply it (investors), through instruments such as shares, debentures and bonds.

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