Financial markets have been established to allow people to invest in financial instruments.
The Financial Market comprises of :
1. Capital Market (which includes the stock market and the bond market)
2. Money Market (which provides short term debt financing and investment)
3. Derivatives Market (which provides instruments for the management of financial risk)
4. Foreign Exchange Market (which facilitates the trading of foreign exchange)
5. Insurance Market (which facilitates the redistribution of various risks)
6. Commodities Market (which facilitates the trading of commodities).
Financial Market helps in raising funds. Individuals, private companies, public corporations, government and other local authorities are some of the participants in financial markets.