is a price index that measures the change in prices of a market basket of goods and services that a typical consumer purchases. Money markets are global markets where long-term debt instruments, which have maturities of greater than one year, are traded. The loans of the business finance companies are never secured by accounts receivable or inventory but rather based on trust among the companies. A highly liquid financial instrument with a maturity of 90 days would be traded in the capital market. If a security market were strong-form efficient, then it would not be possible to earn abnormally high returns (returns greater than those justified by the risks) by trading on private information, information unavailable to other investors, because there would be no such information. In a weak-form efficient market, it would not be possible to earn abnormally high returns by looking for patterns in security prices.
Investment funds, such as mutual funds, sell shares to investors and use the funds to purchase securities. Secondary markets are where the owners of outstanding securities can resell them to other investors and the secondary markets provide the means for investors to convert their securities into cash. Capital markets are markets where equity and debt instruments with maturities of greater than one year are traded. Secondary markets are like used-car markets in that they allow investors to buy or sell previously owned securities for cash. Equities with maturities greater than one year generally are traded in the capital market. Money market instruments are generally issued by firms of the highest credit rating.
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