Short definition: Capital markets are financial markets where long-term securities, such as stocks and bonds, are bought and sold.
Explanation: These markets facilitate the flow of capital between investors and companies or governments that need to raise funds for long-term investments or operations. Capital markets play a crucial role in economic growth by enabling businesses to access the funds they need to expand and innovate.
Example: The New York Stock Exchange (NYSE) and the NASDAQ are examples of major capital markets where companies issue and trade stocks.
Additional information (optional): Capital markets can be divided into primary markets, where new securities are issued, and secondary markets, where existing securities are traded. They are also categorized based on the types of securities traded, such as equity markets (stocks) and debt markets (bonds).