A capital market is a platform where long-term funds are raised and allocated between suppliers (investors) and demanders (borrowers) of capital. It facilitates the exchange of securities, such as stocks and bonds, between investors and issuers (companies and governments) to meet their medium to long-term financial needs. Types of Capital Markets: Primary Market: Also known as the new issue market, it’s where companies issue new securities (stocks, bonds, etc.) for the first time to raise capital. Examples include Initial Public Offerings (IPOs) and rights issues. Secondary Market: It’s where existing securities are traded between investors, allowing them to buy and sell securities that have already been issued in the primary market. Examples include stock exchanges (e.g., NYSE, NASDAQ) and over-the-counter markets