What is capital marker?

Capital Marker:

             Capital market is a market for long-term funds. Corporate need long term fund for the purpose of meeting capital expenditure like buying technology,machinery,undertaking capacity expansion, installation of pollution control equipment,strategic take over of other companies etc,period of repayment may be either a vary long period as much as 30 years in case of government bonds or fund raised are repayable only on the liquidation of companies as in the case of equity shares.Capital market is important for the economic development of the country.  

Capital Market Instruments

            Capital market instrument are broadly classified into:

A.Ownership securities:The securities which give the status of the owner of the entity to which fund are provided are called ownership securities.we have two treasury products that can be called ownership securities :equity shares and preference shares.

B.Debt Securities: These securities offer creditor ship status to the lender.In ownership securities,the internet has to be paid irrespective of profit. Important debt securities are presented below.

A.Government bonds.
B.Corporate bonds/debenture.
C.Perpetual bonds.