Capital market operators deal in the

1. Analyze the question The question asks what capital market operators deal in. The key phrase is "capital market," so we need to recall what that market is for.

2. Explain the concept Financial markets are divided into two main types:

• Money market: deals in short-term funds, usually up to one year. Instruments include treasury bills, commercial bills, certificates of deposit and call money. Operators include commercial banks, discount houses and the Central Bank.
• Capital market: deals in medium- and long-term funds, usually more than one year. Instruments include stocks and shares, bonds, debentures and long-term loans. Operators include the Stock Exchange, stockbrokers, issuing houses, development banks and insurance companies. These funds are used mainly for investment, such as building factories and expanding businesses.

3. Work through the options

• A. Short-term loans only: This describes the money market, not the capital market. Wrong.
• B. Long-term loans for investment: This matches the definition of the capital market, which channels long-term funds to businesses and governments for investment. Correct.
• C. Treasury bills: These are short-term government securities (91 days, for example) traded in the money market. Wrong.
• D. Capital equipment: This is the buying and selling of physical goods like machinery. That happens in the goods market, not the financial market. Wrong.

4. Answer The correct answer is B.

5. Exam tip Link "capital" with "long-term" and "money" with "short-term." If an option mentions treasury bills or "short-term only," it is a money market item. If it mentions shares, bonds or long-term investment funds, it points to the capital market.