Financial markets do what all markets do – price discovery. Fish markets find the price of fish, gold markets the price of gold, job markets determine your salary. The price of money means the financial markets mobilize savings into investments – and channel them for various uses. It determines the prices of bonds, equities, warrants, etc. Broadly there are four broad classifications –
a. Debt market b. Money Market c. Capital Market and d. Forex market
Each of them are of course interlinked – and the whole world markets are linked in some form or the other.
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