Financial market

The financial market is a broad term that describes any marketplace where trading of securities including equities, bonds, currencies, and derivatives takes place. It plays a crucial role in the smooth functioning of economies by facilitating liquidity, enabling price discovery, and providing a platform for raising capital. Participants in financial markets include individual investors, institutional investors, governments, and corporations. Financial markets can be classified into two types: primary markets, where new securities are issued, and secondary markets, where existing securities are traded among investors. Understanding the dynamics of the financial market is essential for making informed investment decisions and managing risks effectively.