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What are capital market instruments?

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βˆ™ 2011-01-19 11:48:38

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Capital market instruments Capital market instruments are those instruments which are not facilitate the transfer of capital in the financial markets (!).

Let's start with a basic definition of capital markets. A capital market is where people (individuals, corporations, governments)lend or borrow money.

To faciliate an example, we ask: how do lenders decide who should borrow from them? The markets have evolved uniform instruments to help lenders in the capital markets make investment decisions.

One example of these uniform instruments is a fixed rate bond. A fixed rate bond allows a company/government to borrow money for a fixed period of time while paying a fixed interest rate on that borrowed money. In the capital markets, the uniformity of fixed rate bonds faciliate the transfer of capital from lender to borrower.

Other examples of capital market instruments include equity, floating rate bonds, convertible bonds, asset backed securities, mortgage backed securities, and interest rate swaps.

2011-01-19 11:48:38
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Related Questions

Capital market instruments?

Equity and Debt instruments are the broader classification of capital market instruments.

What are some examples of capital market instruments?

Capital market instruments include futures, such as mortgages. These financial instruments aren't readily available on secondary markets, but to businesses on the primary market.

What are the Capital market instruments in Pakistan?

The capital market instruments in Pakistan are the equity market, and financial system that consists of NFBIs. Pakistan's stock market trades on the Karachi Stock Exchange.

How are capital market instruments used?

Capital market instruments exist to generate funds for companies and corporations. Some of those instruments are stocks, bonds, debenture, treasury bills and fixed deposits.

What are the differences between money market and capital market?

money market instruments are for short term period like treasury bills..n capital market instruments are for long term period like bonds..

What are types of financial instruments in capital markets?

The financial instruments in capital market are stock or share, bond, mortgage, and loan.

What is capital market and debt market?

The capital market provides financing to meet the denomination, liquidity, maturity, risk (with respect to credit, interest rate, and market), and other characteristics desired by those who have a surplus of funds and those who have a of funds. The capital market as a whole consists of overnight to long-term funding. The short to medium end of the maturity spectrum is called the money market proper, and the long end is identified as the capital market. The financial instruments range from money market instruments to thirty-year or longer bonds in credit markets, equity instruments, insurance instruments, foreign-exchange instruments, hybrid instruments, and derivative instruments. There has been an explosion of innovation in the creation and development of instruments in the money and capital markets since about 1960 in both debt and equity instruments. -Jennifer

What are the principal instruments for sourcing fund from the capital market?

Stocks or Shares.

What instruments are available in the capital market in Bangladesh?

Money Market InstrumentsT-BillCommercial paperNegotiable certificate of depositBanker acceptanceCapital Market InstrumentsBondsStocksGovt SecuritiesBank and consumer commercial paperDebentureMortgageby Financial Analyst - Rahman

What is the difference between capital market and derivative market?

What is the difference between capital market and money market?" == == The capital market Deals with long term funds.But the money market deals with short term funds. CM is Government controlled, but MM is Central Bank controlled CM - Return of capital is determined by demand/supply of short term funds. But, in the MM, Interest rate is determined by demand/supply of capital. CM Instruments-Shares, Debentures. PM instruments - Cheques,promissory bonds,etc. notes,Govt.Bonds CM - Provides fixed capital . MM - provides working capital CM - Capital Market MM- Money Market FINE?

What financial instruments are available in the capital markets?

The financial instruments range from money market instruments to thirty-year or longer bonds in credit markets, equity instruments, insurance instruments, foreign-exchange instruments, hybrid instruments, and derivative instruments.

Do capital market instruments include both long term debt and common stocks?


What is the Indian Capital Market?

Capital market is a market for long-term debt and equity shares. In this market, the capital funds comprising of both equity and debt are issued and traded. This also includes private placement sources of debt and equity as well as organized markets like stock exchanges. Capital market includes financial instruments with more than one year maturity.

What are some of the instruments involved in money market investment?

Money market investments use paper instruments as opposed to the capital market which uses equity and bonds. Asset backed financial paper includes auto loans and credit card debts.

What do you mean by capital market?

capital market is a market where long term loans are availble that place called capital market

Is a preferred stock a money market or a capital market?

capital market

Who are the capital market and money market operators?

who are the operators of money market and capital market

What are the main functions of the Capital Market?

1. Raise capital for industry 2. Provide liquidity for financial instruments that trade in a secondary market ___ A capital market is a market for securities, where business enterprises (companies) and governments can raise long-term funds. It is defined as a market in which money is provided for periods longer than a year, as the raising of short-term funds takes place on other markets (e.g., the money market).

Is the stock market a part of the capital market?

The stock market is part of the Capital Market. The Capital Market also includes the bond market. The U.S. Securities and Exchange Commission (SEC)protects investors in the capital market from fraud.

What is the functions of a capital market?

functions of capital market

Is a common stock a money market or capital market security?

capital market

What is the difference between money market and bond market?

Money Market: Usually reffer to a market where short term meturity securities are traded. short term securities are securities who's meturity period is from one day to less then a year, Money market have minimal risk then capital market. the example of money market instruments are T-bills, Commercial papers, Bank's acceptences and repos etc. Capital Market: reffered to a market where long term meturity securities are traded, securities traded in capital market have meturity period of one or more then one year (defence securities have meturity period of upto 20 years and more). capital market have more risk then money market. the example of capital market securities are bonds and shares etc.

What is capital instruments used in business?

what is a capital instrument

The role of capital market in economic development a case study of Nigerian stock exchange?

The capital market as a tool for economic development (case study of the nigerian capital market) - - capital market

What are financial markets?

A market for the exchange of capital and credit, including the money market and the capital market.