Read the introductory content and then try this interactive 'File Away' activity on the three main types of financial market.
There are three main types of financial markets for you to understand: money markets, capital markets, and foreign exchange (FOREX) markets.
Markets that provide short-term financing (borrowing and lending) for households and individuals. This form of financing tends to have maturity dates (deadline for repayment) of up to one year.
Markets that provide medium to longer term financing for businesses and governments (maturity dates over one year). Bonds and shares are issued in primary capital markets and the existing assets are then traded on secondary markets.
Foreign exchange (FOREX) markets
Markets where currencies are traded. Currencies can either be traded now in spot markets or on an agreed future date at an agreed price in forward markets. There is a high level of speculation in FOREX markets – this is where investors try to make money from changes in currency prices.
Test your knowledge with this 'File Away' activity below. Good luck!
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