Chapter 2: The Capital Market

In this section

• 2.1 Investment Capital
  • 2.1.1 Definition and Importance of Investment Capital
    A comprehensive overview of investment capital, outlining its definition, significance in economic growth, and diverse sources.
  • 2.1.2 Providers of Capital
    An exploration of the various providers of capital, including individual investors, institutional investors, and government and corporate issuers, and their roles in the capital markets.
  • 2.1.3 Users of Capital
    An in-depth analysis of how various sectors utilize investment capital, focusing on corporate financing, public sector funding, and individual borrowing to drive economic activities.
• 2.2 The Financial Instruments
  • 2.2.1 Equity Instruments
    A detailed exploration of equity instruments, including common and preferred shares, along with warrants and rights.
  • 2.2.2 Debt Instruments
    An in-depth exploration of debt instruments including government bonds, corporate bonds, and money market instruments in the context of the capital market.
  • 2.2.3 Derivative Instruments
    An in-depth exploration of derivative instruments such as options, futures, forwards, swaps, and other complex products, highlighting their uses in risk management and speculation.
  • 2.2.4 Alternative Financial Instruments
    A comprehensive analysis of alternative financial instruments available in the Canadian capital market, focusing on Real Estate Investment Trusts (REITs), Hedge Funds, and Exchange-Traded Funds (ETFs).
• 2.3 The Financial Markets
  • 2.3.1 Primary Markets
    Understanding the Primary Markets, including IPOs, Debt Issuance, and the Role of Underwriters in the Capital Market.
  • 2.3.2 Secondary Markets
    An examination of secondary markets, including exchange-traded and over-the-counter markets, and their roles in liquidity and price discovery.
  • 2.3.3 Auction Markets
    An in-depth exploration of auction markets, highlighting their mechanics, notable examples like the New York Stock Exchange, and the advantages they offer, including transparency and efficiency.
  • 2.3.4 Dealer Markets
    Exploring dealer markets within the financial sector, their comparison with auction markets, and the essential roles and activities of dealers.
  • 2.3.5 Electronic Trading Systems
    A detailed exploration of the evolution, functionality, and impact of electronic trading systems on financial markets.