What is a Financial Market?
A Financial Market can be defined as a market in which the creation and transfer of financial assets are done. As against a real transaction that engages exchange of money for real goods and services, a financial transaction occupies transfer or creation of a financial asset. Financial Assets corresponds to a claim to the imbursement of a sum of money sometime in the future or periodic payment in the form of dividend or interest.
The money market can be defined as a wholesale debt market for highly - liquid, short - term, low - risk instrument. Money market is subjugated mostly by government, financial institutions and banks. Funds are available in Money market for periods ranging from one day up to one year.
The aim of capital market is to finance long term investments. The transactions that place in this market are for periods over a year.
Forex market deals with the multi - currency requirements. The multi - currency requirements are met by the currencies exchange. Depending on the exchange rate that is pertinent, the funds transfer takes place in this market.
Credit market can be defined as a place where banks, Financial Institutions and NBFCs deal in short, medium & long - term loans to individuals and corporate.