Capital markets are platforms where funds change hands between suppliers and those in need of capital. They encompass various markets such as stocks, bonds, and forex. These markets aid economic growth by supporting capital formation and offering businesses access to funds for expansion. They permit investors to diversify portfolios, manage risk, and drive stable returns. Capital markets function through issuing securities in primary markets and trading them in secondary markets. Participants include underwriters, brokers, traders, regulators, and analysts. Challenges like insider trading, market manipulation, and systemic risk exist. The future involves technological advances, regulatory changes, globalization, and the rise of ESG investing.
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