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). …