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Stoks and bonds

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16y ago

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What markets in which money is lent for periods longer than one year?

Capital markets


What are capital market instruments?

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.


Does capital markets instrument provide security?

Yes


What are the functions performed by the capital markets?

Selling and buying of shares


What are the limitations of capital markets?

The limitations of capital markets are the unbalanced importance of financial flows and conduit of economic crisis. This type of market is extremely unstable financially when currency values fluctuate.