What is a primary function of the international capital market?

What is a primary function of the international capital market?

• A. To provide consumer loans
• B. To insure bank deposits
• C. To facilitate short-term retail lending
• D. To provide funds for business and investor needs such as machinery

Answer: (D)

International capital markets connect savers and borrowers across borders and mainly handle long-term funding. Their primary function is to provide funds for business investments and investor needs, such as financing machinery and other durable assets, by allowing companies to raise capital through issuing bonds or shares. This is different from consumer lending or short-term retail lending, which are typically handled by banks and money markets, and from deposit insurance, which is a regulatory protection. So the best description is providing funds for business and investor needs such as machinery.

International capital markets connect savers and borrowers across borders and mainly handle long-term funding. Their primary function is to provide funds for business investments and investor needs, such as financing machinery and other durable assets, by allowing companies to raise capital through issuing bonds or shares. This is different from consumer lending or short-term retail lending, which are typically handled by banks and money markets, and from deposit insurance, which is a regulatory protection. So the best description is providing funds for business and investor needs such as machinery.