ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Financial markets create securities products that provide a return for those who have excess funds (Investors/lenders) and make these funds available to those who need additional money (borrowers). The stock market is just one type of financial market.

Detailed explanation-2: -A financial market is a market for the creation and exchange of financial assets.

Detailed explanation-3: -Financial Markets include any place or system that provides buyers and sellers the means to trade financial instruments, including bonds, equities, the various international currencies, and derivatives. Financial markets facilitate the interaction between those who need capital with those who have capital to invest.

Detailed explanation-4: -Financial markets comprise five key components: the debt market, the equity market, the foreign-exchange market, the mortgage market, and the derivative market.

Detailed explanation-5: -The 4 types of financial markets are currency markets, money markets, derivative markets, and capital markets. Capital markets are used to sell equities (stocks), debt securities.