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What is Market? A market is any one of a variety of systems,institutions, procedures, social relations andinfrastructures whereby parties engage in exchange.

While parties may exchange goods and services by barter, most markets rely on sellers offering their goods or services (including labor) in exchange for money from buyers. Types of Market? Types of markets Although many markets exist in the traditional sense such as a marketplace there are various other types of markets and various organizational structures to assist their functions. The nature of business transactions could define markets. [edit]Financial markets Financial markets facilitate the exchange of liquid assets. Most investors prefer investing in two markets, the stock markets and the bond markets. NYSE, AMEX, and the NASDAQ are the most common stock markets in the US. Futures markets, where contracts are exchanged regarding the future delivery of goods are often an outgrowth of general commodity markets. Currency markets are used to trade one currency for another, and are often used for speculation on currency exchange rates. The money market is the name for the global market for lending and borrowing. [edit]Prediction markets Prediction markets are a type of speculative market in which the goods exchanged are futures on the occurrence of certain events. They apply the market dynamics to facilitate information aggregation. Key Players The bond market can essentially be broken down into three main groups: issuers, underwriters and purchasers. The issuers sell bonds or other debt instruments in the bond market to fund the operations of their organizations. This area of the market is mostly made up of governments, banks and corporations. The biggest of these issuers is the government, which uses the bond market to fund a country's operations, such as social programs and other necessary expenses. The government segment also includes some of its agencies such as Fannie Mae, which offers mortgage-backed securities. Banks are also key issuers in the bond market and they can range from local banks up to supranational banks such as the European Investment Bank, which issues debt in the bond market. The final major issuer is the corporate bond market, which issues debt to finance corporate operations. The underwriting segment of the bond market is traditionally made up of investment banks and other financial institutions that help the issuer to sell the bonds in the market. In general, selling debt is not as easy as just taking it to the market. In most cases, millions - if not billions - of dollars are being transacted in one offering. As a result, a lot of work needs to be done - such as creating a prospectus and other legal documents - in order to sell the issue. In general, the need for underwriters is greatest for the corporate debt market because there are more risks associated with this type of debt. The final players in the market are those who buy the debt that is being issued in the market. They basically include every group mentioned as well as any other type of investor, including the individual. Governments play one of the largest roles in the market because they borrow and lend money to other governments and banks. Furthermore, governments often purchase debt from other countries if they have excess reserves of that country's money as a result of trade between countries. For example, Japan is a major holder of U.S. government debt.

A few decades ago, worldwide, buyers and sellers were individual investors, such as wealthy businessmen, usually with long family histories to particular corporations. Over time, markets have become more "institutionalized"; buyers and sellers are largely institutions (e.g., pension funds,insurance companies, mutual funds, index funds, exchange-traded funds, hedge funds, investor groups, banks and various other financial institutions). The rise of the institutional investor has brought with it some improvements in market operations. Thus, the government was responsible for "fixed" (and exorbitant) fees being markedly reduced for the 'small' investor, but only after the large institutions had managed to break the brokers' solid front on fees. (They then went to 'negotiated' fees, but only for large institutions.[citation needed]) However, corporate governance (at least in the West) has been very much adversely affected by the rise of (largely 'absentee') institutional 'owners'.[citation needed]