Financial Markets

Financial markets are platforms or systems where buyers and sellers engage in trading financial assets. These markets facilitate the exchange of securities, commodities, currencies, and other financial instruments, allowing participants to buy, sell, or trade assets. Financial markets are essential for the efficient allocation of resources in an economy, as they provide the means for companies to raise capital, investors to find opportunities, and for price discovery of various financial goods based on supply and demand dynamics. Major types of financial markets include the stock market, bond market, foreign exchange market (forex), and derivatives market. They play a critical role in the overall functioning of the economic system by enabling liquidity, transparency, and risk management.