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The market where investment instruments like bonds, equities and mortgages are traded is known as the capital market. The primal role of this market is to make investment from investors who have surplus funds to the ones who are running a deficit.

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Capital MarketBy,Parth PurohitCapital MarketThe market where investment instruments like bonds,equities and mortgages are traded is known as the capitalmarket.The primal role of this market is to make investment frominvestors who have surplus funds to the ones who arerunning a deficit.Attribute of Capital Market No entry barriers Large number of buyers and sellers Divisibility of financial assets Absence of transaction cost No tax difference Free tradingSegment of Capital Market Primary Market It is that market in which shares, debenturesand other securities are sold for the first time forcollecting long-term capital. This market is concerned with new issues.Therefore, the primary market is also called NEWISSUE MARKET.Cont. In this market, the flow of funds is from saversto borrowers (industries), hence, it helps directlyin the capital formation of the country. The money collected from this market isgenerally used by the companies to modernize theplant, machinery and buildings, for extendingbusiness, and for setting up new business unit.Cont. Secondary MarketThe secondary market is that market in which thebuying and selling of the previously issued securities isdone.The transactions of the secondary market aregenerally done through the medium of stock exchange.The chief purpose of the secondary market is tocreate liquidity in securities.Capital Market Instrum

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