Which of the following is a good example of capital market?
Answer Details
The stock exchange is a good example of a capital market.
A capital market is a financial market that is used for buying and selling long-term securities such as stocks, bonds, and other financial instruments. The stock exchange is a marketplace where companies can raise funds by issuing stocks or shares to investors. These shares represent ownership in the company and can be bought and sold on the stock exchange.
Investors who purchase shares in a company through the stock exchange are essentially buying a piece of ownership in that company. They hope that the value of the shares they own will increase over time, which will allow them to sell the shares at a profit.
In addition to allowing companies to raise funds through the issuance of shares, the stock exchange also provides investors with a means of diversifying their investment portfolios. By investing in stocks from different companies across different industries, investors can spread their risk and potentially increase their returns.
Therefore, the stock exchange is a good example of a capital market, as it provides a platform for companies to raise funds and for investors to buy and sell shares in these companies.