The financial market world can be broken down into two main categories based on how long investments are held:

1. Money Markets: Think short-term! These markets deal with investments with maturities under a year, like government bills or certificates of deposit (CDs). They’re ideal for parking your cash and earning some interest before you need it.

2. Capital Markets: Here, investments have longer lifespans, like stocks or bonds. Stock markets allow you to own a piece of a company, hoping it grows in value. Bond markets let you lend money to governments or companies, earning interest in return.

Within Capital Markets, there are even more specialized areas:

• Derivative Markets: These deal in contracts based on the value of other assets, like stocks or currencies. Imagine a betting pool on future stock prices!
• Foreign Exchange Markets (Forex): This is where currencies are traded. Travelers exchanging money are essentially participating in the Forex market.

Each market type plays a vital role – from helping businesses raise money to allowing individuals to invest and grow their wealth.