The capital market is a financial market in which long-term debt or equity is provided in return for the expectation of regular, periodic payments of interest and/or dividends. The instruments used in the capital market are stock, bonds, futures, options, derivatives and other financial derivatives.
The instruments used in the capital market are stocks, bonds, and other securities. But the most important instrument is the stock itself because it is the only one that can be traded on an exchange.
There are three main types of instruments used in capital market: 1) Debt securities- This includes bonds, debentures and notes with a fixed or floating interest rate. 2) Equity securities- This includes stocks and shares in companies, mutual funds and ETFs. 3) Derivatives- These include futures contracts on commodities such as gold or oil as well as options contracts on other assets such as stock indexes or currencies
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