CAPITAL MARKET

These are financial institutions set up for the
granting of medium and long term loans. They
provide loans to commerce, industries, local
authorities and the government which required
long term finance for fixed investment.
Sometimes firms, individuals, business etc
need funds for much longer period than they
can obtain on the money market. They thus
fall on the capital market for long term loans.
The main medium of item used on capital
market is sale of security, a document
embodying a promise by a borrower to pay
periodically a fixed or variable return to the
owner of the security.
Institutions of the capital market include :
1. The stock exchange.
2. Development banks.
3. Investment banks.
4. Building societies.
Main groups of capital :
1 .NEW ISSUE MARKET >> This deals with
securities which are issued for the first time.
2. STOCK EXCHANGE :>> This deals with
existing securities which have already been
issued to the market.

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