Some Capital Market Firms in the United States include:

ORIX Capital Markets - SAMCO Capital Markets - LOUIS Capital Markets - WANCHOVA Securities - SBI Capital Markets - PNC Capital Markets. 

             

 Bond Investment - A Capital Market Banking Instrument


Bond investment is different from that of stock investment. Bond investment is investing in the debt instrument that is issued by a company or government. The bond investor is actually lending money to the company while in return is promised to be paid the full principal amount plus a fixed periodic payout. The yield on the bond is calculated by putting together the final principal and total payouts received. The yield is the effective interest rate for the tenure of the bond.

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The Capital Market is also known as The Securities Market because long term funds are raised through trade on debt and equity securities. These activities may be conducted by both government and the private sector.

This market is divided into:

  • A primary capital market and
  • A secondary capital market.

The primary market is designed for the new issues and the secondary market is meant for the trade of existing issues. Stocks and bonds are the two basic capital market instruments used in both the primary and secondary markets. There are three different markets in which stocks are used as the capital market instruments: the physical, virtual, and auction markets. Bonds, however, are traded in a separate bond market. This market is also known as a debt, credit, or fixed income market. Trade in debt securities is done in this market. These include: the T-bills and Debentures. These instruments are more secure than the others but they also provide less return than the other capital market instruments. While all capital market instruments are designed to provide a return on investment, the risk factors are different for each and the selection of the instrument depends on the choice of the investor. The risk tolerance factor and the expected returns from the investment play a decisive role in the selection by an investor of a capital market instrument.

The instruments should be selected only after doing proper research and due diligence.

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