Diverse Dimensions of Financial Markets: Classification and Functions. Lesson 4
Section 1: Start Your Stock Market Journey: Simple Lessons from A to Z. Lesson 4: Diverse Dimensions of Financial Markets: Classification and Functions. Classification of Financial Markets: 💹A simple chart to understand the hierarchy of the Market. By Nature of Claim: Debt Market: Involves buying and selling debt instruments like bonds and debentures. These instruments offer a fixed claim on the issuing entity's assets. Equity Market: Involves trading stocks of public limited companies. Investors become shareholders with a residual claim on company assets. By Maturity of Claim: Money Market: Trades short-term monetary assets like treasury bills and certificates of deposit, with an investment horizon not exceeding a year. Low risk and interest-based returns. Capital Market: Trades medium to long-term assets like equity shares, suitable for holding over an extended period. Divided into primary and secondary markets . By Timing of Delivery: Cash Market: Real-tim...