Introduction

A financial market is a key institution whose knowledge is essential for the companies to raise fund and invest in their business for generating profits. In the case at hand, Jagdambay Exports (“the client”) being an Indian entity is considering going public and thus, it requires in-depth knowledge about the United States financial market.

The financial market is characterized as a place for selling and buying of securities to raise funds (Brigham & Houstan, 2012). Thus, in simple terms, it is a platform for the sale and purchase of securities such as bonds, shares, and equities. The financial market has several components out of which the most important for the client is the capital market and the money market.
The money market deals with the short-term financial instruments and on the other hand, the capital market deals with assets and securities with the maturity period of over one year (Ehrhardt & Brigham, 2008).

There is also a market in which goods are sold for cash and an immediate delivery takes place. These are the cash and spot market. This is a complex market and is not suitable for inexperienced traders (Ehrhardt & Brigham, 2008). Further, the derivate markets, primary and secondary markets, and forex & interbank markets are also integral components of financial markets.

For the client, it is pertinent to understand the difference between the financial market and market for physical assets. Both the markets are different from each other in the real or tangible sense of view. A physical assets market is a place where physical assets like machinery, tools and other important raw materials for production are traded (Slee, 2011).

In stark contrast, the financial market is a platform where intangible assets such as bonds, shares, treasury bills and other forms of securities are traded to raise funds.

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