What is a "capital market"?

A capital market is defined as a venue where financial securities, such as stocks and bonds, are bought and sold. This market plays a crucial role in the economy by facilitating the raising of capital for businesses and governments, allowing them to fund operations, expansions, and public initiatives. In a capital market, investors can acquire ownership stakes in companies or lend money through debt instruments, ultimately influencing the flow of capital and investment in various sectors.

Other options describe different types of markets. Trading consumer goods pertains to retail markets, while labor markets focus on employment opportunities and job-seeking. Agricultural markets specifically handle the buying and selling of crop products and livestock. Each of these markets serves distinct purposes that do not involve the trading of financial securities, which is the core function of capital markets.