2.4 : שוק ההון

The Capital market is a financial market where long-term securities such as stocks, bonds, and derivatives are traded.

It is a platform for investors, companies, and governments to raise funds and allocate capital.

Consider the New York Stock Exchange, where investors trade shares of listed companies, providing these businesses with access to capital for growth and expansion.

For example, Cloud Tech is a startup seeking funds to develop a new product. It can raise capital by listing its shares on the New York Stock Exchange and selling ownership stakes to investors.

On the other hand, investors buy shares in Cloud Tech, hoping to profit from its success.

As Cloud Tech grows and its share price increases, investors may sell their shares for a profit, while the company can issue additional shares to raise more capital for further expansion. This cycle of buying and selling shares on the Stock Exchange facilitates efficient capital allocation and economic growth.

So, the capital market catalyzes wealth creation, enabling trade and encouraging growth.