*Functions of capital market:
  1. Provides long-term financing for businesses, governments, and individuals.
  2. Allows companies to raise capital by issuing stocks or bonds to investors.
  3. Supports economic growth by funding long-term investments in infrastructure, research, and development.
  4. Offers investors the opportunity to participate in the growth of companies and the economy over the long term.
*Risk management in capital market:
1. Market Risk: Capital market participants are exposed to market risk, which is the risk of investments losing value due to market fluctuations. Investors manage market risk by diversifying their portfolios across different asset classes and industries.
  2. Credit Risk: In the capital market, investors face credit risk when investing in corporate bonds or other debt instruments. Risk management strategies include credit analysis, diversification, and monitoring credit ratings.
  3. Systemic Risk: Capital markets are susceptible to systemic risks that can affect a broad range of assets. Risk management in this context involves monitoring macroeconomic factors, geopolitical events, and regulatory changes.
*Role of central bank in capital markets:
1. Influencing Long-term Interest Rates: Through mechanisms such as QE and forward guidance on monetary policy, central banks can impact long-term interest rates, which affect capital markets.
