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Question no. 21910

What financial sector handles long-term debt securities ?

Select your answer for: What financial sector handles long-term debt securities ?
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Answer: C. Capital market

Explanation

The capital market is the financial sector where long-term debt and equity securities are issued and traded. Long-term financial instruments with maturities exceeding one year belong strictly to capital markets. Corporations and governments raise long-term capital through bonds and stocks in this specific sector. Capital markets include both stock markets and long-term bond markets for corporate financing. Money markets handle short-term debt instruments with high liquidity and maturities under one year. Financial intermediaries bridge the gap between savers and entities needing long-term investment capital.

Companies fund major infrastructure projects and corporate expansions by issuing securities in capital markets. Retirement planning relies heavily on long-term investments purchased through organized capital market channels. Economic stability is closely linked to the health and liquidity of national capital markets. Option A refers specifically to equity shares rather than encompassing all long-term debt securities. Option B describes a general competitive marketplace rather than a specific financial sector category. Option D relates to international trade finance rather than domestic long-term debt markets.

Subject
Economics
Category
Economics
Topic
—
Difficulty
medium

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