Writer Usage of Research
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a. First is according financial claim. The claims are traded in a financial market may be either for a fixed dollar amount or a
residual amount. b. Second way is according to the maturity of the claims. Financial
market for the short term financial assets called money market, and the one for longer maturity financial assets is called the
capital market. The traditional cut off between short term and long term is one year. A financial asset with a maturity of more
than one year is part of the capital market. Thus, the debt market can be divided into debt instruments that are part of the
capital market, and those that are part of the capital market, depending on the number years to maturity.
c. Third way to classify financial market is by whether the financial claims are newly issued. The market for newly issued
financial asset is called the primary market. After a certain period of time, the financial is bought and sold i.e., exchanged
or traded among investors. The market where this activities takes place is referred to as the secondary market.
According to Roberto G. Medina 1988 Capital Market is that
portion of the financial market which deals with longer term loanable funds, the money market in contrast deals with short term funds. The
difference between capital market and money market is the length of
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time. Money market deal with short term fund which is for a year the maturity date and capital market deal with long term maturity date
which is more than a year. There, in financial market where the traded place for all
financial claims securities. Financial claims could be divided into: a. Financial Asset is claims for future payment by one economic unit
on another Arthur J. keown : 2009. Financial asset serves economic functions which is transfer funds from those parties who
have surplus funds to invest to those who needs funds to invest in intangible assets. Fabozzi, J Frank Franco Modigliani : 2009
b. Real Assets is tangible assets such as houses, equipment, and inventories. Arthur J. keown : 2009.
One of company goal is raising fund and it can be done through financial market. Let us take a look the flow of capital through the financial
markets among corporation, individuals, and the government.