Financial Market

A financial market is a marketplace where financial instruments such as stocks, bonds, currencies, and derivatives are bought and sold. These markets facilitate the exchange of capital and liquidity among participants, which include individual investors, institutions, and governments. Financial markets are essential for price discovery, which means determining the value of financial assets based on supply and demand dynamics. They can be categorized into various types, including primary markets, where new securities are issued, and secondary markets, where existing securities are traded. Efficient financial markets help to allocate resources effectively, enabling businesses to raise funds for growth and providing investors opportunities for returns on their investments. Additionally, financial markets play a crucial role in economic stability and growth by fostering investment and savings activities.