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The Role of the Capital Market and Its Functions for the National Economy

The Role of the Capital Market and Its Functions for the National Economy. The role of the capital market is quite important in the country’s economy.

So that the capital market is classified as something crucial in the nation’s economy.

Perhaps for most of the common people still do not understand the capital market.

But for those who are already struggling in the investment world, especially stocks, will understand it much better.

In addition to covering various financial instruments, both short and long term, there are also many products in it.

The products from these investments include mutual funds, bonds, derivative instruments, and stocks.

Even the role of the capital market is sufficient to help the nation’s economy through investors and companies.

To get to know more about the capital market, let’s look at the following review.

The Role of the Capital Market and Its Functions

The capital market is one of the places used or financial instruments that sell and buy various instruments. Be it mutual funds, stocks and others.

The capital market is also used as an alternative for investors for various activities. Starting from saving in the bank, buying land, or insurance.

Given the role that is quite important, there is nothing wrong if you know more clearly about this.

Some of the important roles of the capital market include:

  • Provide opportunities for investors to obtain liquidity. You do this by selling the securities to other people
  • Another role is being able to provide transaction facilities for shares and securities traded
  • Helping investors to earn
  • Assisting business activities in getting funds from other parties to expand their business
  • Reduce transaction costs and securities information. Where investors really need this information in investing
  • The role of the capital market is to help investors to fulfill their wishes with a dividend policy or normal security price stability
  • The capital market provides an opportunity for investors to sell their lag stocks
  • Helping investors to more easily interact and participate in the economic development of the general public.

General Capital Market Functions

Once you know its role, now there are also functions of the capital market that you can know.

There are many functions of the capital market both in general and in the economy.

Following are the functions of the capital market in general.

In general, the capital market has many functions. One of them as a parameter of a country’s economy.

In addition, the capital market can also be a means to create new workers.

It is even able to increase the income of a country and the production capacity of the company.

Equitable income can increase both income and community income.

So as to increase business capital for issuers who are in need of additional funds.

All of that is a function of the existence of the capital market in general.

Actually there are many other functions, both from an economic and state financial perspective.

The role of the capital market, which helps improve the economy, keeps investment activities running, especially in the stock market.

Source : HarapanRakyat.com

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