Capital Markets include which of the following descriptions?

Capital Markets include which of the following descriptions?

• A. Markets for debt instruments with maturities over one year and for equity instruments
• B. Short-term deposit accounts
• C. Currency trading only
• D. Insurance products

Answer: (A)

Capital markets are the arena for long-term funding and investing. They include the issuance and trading of debt instruments with maturities longer than one year (such as bonds) and equity instruments (stocks). This distinguishes them from money markets, which deal with short-term finance maturing in one year or less. Currency trading belongs to foreign exchange markets, and insurance products are part of insurance and risk management rather than capital markets. So the description that fits capital markets is markets for debt instruments with maturities over one year and for equity instruments.

Capital markets are the arena for long-term funding and investing. They include the issuance and trading of debt instruments with maturities longer than one year (such as bonds) and equity instruments (stocks). This distinguishes them from money markets, which deal with short-term finance maturing in one year or less. Currency trading belongs to foreign exchange markets, and insurance products are part of insurance and risk management rather than capital markets. So the description that fits capital markets is markets for debt instruments with maturities over one year and for equity instruments.