What is meant by the term known as financial market?
A financial market can therefore be described as the entire network of markets within the provision of security trading. However, it extends to the bond market, the stocks market, the futures and options market or the foreign exchange market. These markets are very relevant in the working of capitalist economies.
Types of markets
Significant financial markets are as follows; Some of them are grouped into types by varieties and classes of the financial products they bring into the market.
Money markets
Usually, money markets include easy and short term products, which have a maturity of less than one year. They are less risky compared to other markets and therefore its interest returns are lower as well.
Bond market
A bond market is an arrangement whereby investors provide funds for a given period at agreed upon interest rate. There are short term bonds called municipal bonds which may be issued by municipalities, corporations, states and government to finance their operation or project.
Stock market
A stock market is an instinctual financial market which provides the platform for buying and selling of shares in a company by investors or traders. Corporate organizations employ them to sought for capital while investors to gain incomes.
Forex market
The forex market is a very open market through which participants trade or make guesses or engage in hedging activities through the exchange rate of two currencies.
Other common markets
Commodities market: can be best described as the one in which consumers and producers, through trade, exchange tangible and non-tangible goods.
Over-the-counter market: market that is decentralized does not have specific geographical locations where it conducts its business. It entails the performance of actual deals of securities electronically.
