Question

What is a market? Differentiate between the following types of markets: physical asset market versus financial asset markets, spot markets versus futures markets, money markets versus capital markets, primary markets versus secondary markets, and public markets versus private markets.

Answer 1

Market is a place where seller can offer his product to buyer and transaction can be done at mutually agreed price.

Physical market is market where product are sold physically eg TV, AC, etc where as financial market refers to place where shares of company are sold in dematerialized form

Spot market refers to market where asset are sold at their current price where as future market involves selling of product at pre determined price on pre determined future date. Future market are regulated hence there are less chances of counter party default

Money market are used by goverement and corporate body to lend or borrow fund for short period of time where as capital market are used for lending or borrowing money for period of more than 1 year

Primary market referes to market where company list their securities for first time, Secondary market refers to market where already listed shares can be traded

Public Markets exist only to fulfill a public purpose, showcase a community's unique character and culture while serving its everyday shopping needs where as private market refers to market where asset are traded privately ie between certain individuals. eg family member's investment in partnership, company etc