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What Is The Biggest Capital Market In The United States

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United States Capital Market

The United States has the world’s largest economy, which means it has the biggest capital markets; it holds 47% of the world stock market. Unlike other countries after the world wars the United States suffered less disruption to its markets compared to European and Asian markets. On the contrary the US benefited greatly from these wars.
The US stock market is worth $18 trillion and its bond market is worth $24 trillion, which shows how strong the US market really is.

How the Capital Market works.

Capital markets in the United States are the driving force of capitalism. In order for companies to acquire funds for their businesses and projects, they sell securities – stocks and bonds in the company’s name …show more content…

They are the tools that generate funds for companies and governments. They are stocks, corporate bonds, United States Government bonds and securities, and finally mortgages.

Stocks: When a person buys a stock it means he acquires some of the company’s assets and earnings. A stock has two main types: common and preferred. Common stock allows the shareholder to vote in company meetings and collect dividends. Preferred stock doesn’t allow its holder to vote but has a higher claim on assets; they have the priority in receiving dividends.

Corporate Bonds: Corporate bonds are debt securities issued by corporations to finance capital investments. They are riskier than government bonds and thus have higher interest rates. Corporate bonds are the largest in the US bond market and they can easily issue bonds in the secondary markets, which creates liquidity for investors.

United States Government bonds and securities: When a person buys government securities it means he lends money to the federal government to finance the deficits of the US for a specific time. These securities are considered the safest in the market. It has no credit risk, meaning you will get your money on time. The interest rate is lower compared to other riskier debt securities such as corporate

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