The market defined as the interaction of buyers and sellers who trade long-term or intermediate-term money instruments is the ___ market.

The market defined as the interaction of buyers and sellers who trade long-term or intermediate-term money instruments is the ___ market.

• A. Stock
• B. Bond
• C. Currency
• D. Capital

Answer: (D)

Capital markets are where investors trade securities with longer maturities, such as stocks and long-term bonds. This makes them the right label for a market defined by buyers and sellers dealing with long- or intermediate-term money instruments. The stock market is part of the capital market but focuses specifically on equities; the bond market concentrates on debt securities within the capital market; and the currency market handles foreign exchange. Since the description points to long- and intermediate-term instruments, the capital market best fits.

Capital markets are where investors trade securities with longer maturities, such as stocks and long-term bonds. This makes them the right label for a market defined by buyers and sellers dealing with long- or intermediate-term money instruments. The stock market is part of the capital market but focuses specifically on equities; the bond market concentrates on debt securities within the capital market; and the currency market handles foreign exchange. Since the description points to long- and intermediate-term instruments, the capital market best fits.