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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.


What is a emerging capital market?

An emerging capital market refers to a financial market in a developing country that is characterized by relatively low levels of liquidity and less mature financial infrastructure compared to established markets. These markets often offer higher potential returns due to their growth prospects but come with increased risks, including political instability and economic volatility. Investors are attracted to emerging capital markets for diversification and the opportunity to capitalize on rapid economic growth. Examples include markets in countries like India, Brazil, and South Africa.


Does capital markets instrument provide security?

Yes


What are the functions performed by the capital markets?

Selling and buying of shares