Capital and equity markets:

In the present block, the previous unit acquainted you with markets for short-term funds, and we learnt these markets are called money markets. The present unit deals in detail with various markets for long-term funds. These are called capital markets. We will see there are primarily two types of capital markets: debt markets, and equity markets. In the next section, we consider the purpose of capital markets in general, and the various participants in theses markets. In the section after that, we will look at debt and equity as alternative means of raising finance. limits itself to the debt market but provides a detailed discussion about the workings of these markets. The subsequent section turns to equity markets and explains why there is volatility, or risk, in these markets. Finally discusses the indices of share prices and how these are constructed. Let us begin our study of these markets.

We next turned to a discussion of debt markets and equity markets and took up their discussion one at a time, separately. We started with the debt markets and looked at the instruments traded in that market, and discussed some theories regarding their pricing. We next studied equity markets, distinguishing between primary and secondary markets. We learnt about the way the issues are offered in the primary markets and we also looked at the functioning of secondary markets and learnt about their functions and uses. We studied in some detail the way to know if stock markets are advanced and mature in an economic system, or are they merely fledgling and poorly developed. We then learnt a bit about the volatility that characterises equity markets and how these are tackled. Finally the unit discussed indices of share prices. We looked at the requirements of a good stock price index, and came to know the various types of indices in use. The unit finally mentioned some of the important indices in India and abroad.