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When referring to a capital market, it is important to note that the term

can refer to a rather broad range of products and services that are associated

with finances and investments. To that end, a capital market will include such

components as the Stock Market, commodities exchanges, the bond market, and just

about any physical or virtual facility or medium where debt and equity securities

can be bought or sold.

As a market for securities with a very broad reach,

the capital market is an ideal environment for the

creation of strategies that can result in raising long-term funds

for bond issues or even mortgages. At the same time, the capital

market provides the medium for short-term fund strategies as well.

Essentially, any type of financial transaction that is meant to result

in the buying and selling of securities and commodities for profit can

Institutions are also part of the framework of the capital market.

Stock exchanges are one of the more visible examples of established

operations that give form and function to the capital market. Along

with the stock exchanges, support organizations such as brokerage firms

also form part of the capital market. Over the counter markets are also

included in the working definition for a capital market. By providing the

mechanisms that make trading possible, these outward expressions of the

capital market make it possible to keep the process ethical and more easily

governed according to local laws and customs.

Because of the broad structure of the capital market,

investors of all types have the opportunity to participate

in financial strategies that can strengthen the general economy

as well create financial security. Persons who wish to focus on

investment opportunities that are very stable and more or less

ensure a modest return can find plenty of different offerings to

choose from. At the same time, investors who tend to be more adventurous

can also find a wide array of investment types that will allow them to take

some additional risk and possibly realize larger returns on their investments.

While the overall structure of the capital market may be broad, there are a number

of checks and balances that help to keep the market on an even keel, ensuring that

the capital market functions in a manner that is both ethical and legal. rightly

be considered part of the capital market.

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