Generally, capital markets refer to the type of financial markets where the stocks and bonds are traded. Notably, large companies and governments source for long term funding from the capital markets. On the other hand, the money markets refer to the financial markets where short term more liquid financing is available. Generally, money markets refer to cash markets while capital markets sell long term debts or equity securities (Omar, Abduh & Sukmana, 2013). Money markets mostly consist of banks which lend and borrow from and lend to each other.
This act benefits buyers and lenders because it allows the buyers who are looking for housing even low income families to find housing within their budget. While the lenders get their money without having to inflate prices. Also, financial corruption from banks and wall street had influenced the creation of The Great Recession. There was predatory lending in the mortgage markets and banks had knowingly loaned millions of checks on mortgages . This led to a tremendous Economic crash as stated in (document e ).
Financial instruments can be broadly classified into money market instruments and capital market instruments. 1. Money Market Instruments: The money market can be defi ned as a market for short-term money and financial assets that are near substitutes for money. The term ‘short-term’ means generally a period up to 1 year and near substitutes to money is used to denote any financial asset which can be quickly converted into money with minimum transaction cost. The sophistication and versatility of the money market is reflected in the diversity of money market instruments to suit the varied needs of market participants.
Stock Market Failure- Tyler The day the stock markets failed or Black Tuesday, October 29, 1929 In fact, it was one of the major causes that led to the Great Depression. Two months after the original crash in October, stockholders had lost more than $40 billion dollars. Even though the stock market began to regain some of its losses, by the end of 1930, it just was not enough and America truly entered what is called the Great Depression. Coming out of World War I, America was high-rolling. With new products, the automobile, washing machine, and the vacuum and many more.
Capital structure is a structure consist of various fund sources that is used in a firm. The structure is made out of debt and equity. Those two funds are more to long term and permanent compare to debt and equity in a financial structure. The long term funds are used to finance the firm’s assets which contributes to the firm’s operation and growth. A carefully build capital structure will contributes to a good market value.
What were the main causes of the Great Depression? The Great Depression, which began in 1929, was a financial crisis that had a seriously negative impact on the whole of the western world. Although it is agreed by most historians that the crisis began in 1929 with the Wall Street Crash, it was not until the 1930s that the crisis took its toll on the majority of the countries involved. This period would last until 1941, when the United States began preparations to enter the Second World War. Many people believe that the main cause of the Depression was the Wall Street Crash however this is far from the truth.
The Stock Market is a market in which shares of publicly held companies are issued and traded either through exchanges or over-the-counter markets. It is also known as equity market. The stock market makes it possible to grow small amount of money into larger amount of money. It also a person to become wealthy without taking the risk of starting a business. The Stock Market makes the fear of sacrifices that frequently accompany a high-paying career go away.
• Capital Market which consists of: 1. Stock Markets, which provide financing through the issue of shares or common stock, and enable the subsequent trading thereof. 2. Bond Markets, which provide financing through the issue of bonds, and enable the subsequent trading thereof. • Commodity Markets, which facilitate the trading of commodities.
Commodity markets The type of market that deals in the primary economic sector rather than the manufactured goods or the products is called as the commodity market. This is a very common way of trade in the stock market scenario and many people have been investing in this for a long time now. Many multinational companies indulge in these investments and there are also many top level companies that have been doing the leads in the terms of commodity markets. Classifying the commodity markets Investors have the liberty to invest in two types of commodity markets and these are, • Hard commodities: These include the mined out products like the gold and the oil. • Soft commodities: These include the regular agricultural products like the coffee,
Mortgage Markets :Deals with loan and residential, commercial and industrial real estate and on formal and .The Primary Market :When a security is created and sold for the first time in the financial marketplace ,the transaction takes place in the primary market. It is also known as Initial Public Offering (IPO)The Secondary Market :Once a security has been issued, it may be traded from one investor to another .The Money Market :Short term securities are traded in money market. Network of dealers operate in this market .The Capital