Consider the following markets:
- Government Bond Market
- Call Money Market
- Treasury Bill Market
- Stock Market
How many of the above are included in capital markets?
(a) Only one
(b) Only two
(c) Only three
(d) All four
ANS .B
- Capital markets are where savings and investments are channeled between suppliers and those in need. Suppliers are people or institutions with capital to lend or invest and typically include banks and investors. Those who seek capital in this market are businesses, governments, and individuals. Capital markets are composed of primary and secondary markets. The most common capital markets are the stock market and the bond market. They seek to improve transactional efficiencies by bringing suppliers together with those seeking capital and providing a place where they can exchange securities.