CAPITAL MARKET INSTRUMENTS

Capital market instruments are responsible for generating

funds for companies, corporations, and sometimes national
governments. These are used by the investors to make a
profit out of their respective markets. There are a number of
capital market instruments used for market trade, including
Stocks
Bonds
Debentures
Treasury-bills
Foreign Exchange
Fixed deposits
 STOCKS AND BONDS
Stocks and bonds are the two basic capital market
instruments used in both the primary and secondary
markets. There are three different markets in which
stocks are used as the capital market instrument: the
physical, virtual, and auction markets.
Bonds, however, are traded in a separate bond market.
This market is also known as a debt, credit, or fixed
income market.
 DEBENTURES
Debenture are long-term Debt Instrument,
which is not backed by Collaterals. Debentures
are unsecured debt backed by the
creditworthiness and reputation of the
Debenture issuer and documented by an
agreement called an indenture.
 FOREIGN EXCHANGE MARKET
• Foreign exchange market or Forex Market
handles the trading of one currency with
another. Though there is no physical existence
of this market, the foreign exchange market is
the largest financial market in the world, with
its average daily traded amount reaching to US
$2-2.5 trillion.
 FIXED DEPOSIT

• A fixed-income debt security, usually issued by

banks. A Fixed Deposit is like loaning the bank
your money. In return, they pay you interest.