A capital market is a system that allocates financial resources in the form of debt and equity according to their most efficient uses.

Question

Quizplus · Accepted Answer

A capital market is designed to facilitate the allocation of financial resources to their most productive uses. This often involves the purchase and sale of stocks, bonds, and other financial instruments, which provide companies with the funding necessary to expand operations, undertake new projects, or make strategic investments. The goal of capital markets is to ensure that funds are directed toward the areas that promise the greatest return on investment, while minimizing risk and promoting transparency and efficiency in the financial system.

A Capital Market Is a System That Allocates Financial Resources