【答案解析】{{B}}Money markets:{{/B}} {{I}} Concept:{{/I}} —Money markets are exchange systems where short-term, usually less than one year, highly liquid and readily marketable credit instruments are traded. {{B}}Instruments traded in Hongkong money markets:{{/B}} —Negotiable certificates of deposits: -a financial instrument issued by a bank or a deposit-taking company as evidence of indebtedness; -repayable either on demand or at a determined future time; -carries either a fixed or floating interest rate. {{I}} —Inter-bank lending and borrowing:{{/I}} -in Hongkong, it is an intangible market participated by licensed banks and deposit-taking companies; -borrowing is on unsecured and short-term basis, ranging from overnight call up to 6 to 12 months; -HIBOR is used to determine the offer price. {{I}} —Floating rate notes:{{/I}} -a negotiable instrument bearing a floating interest rate and issued by a company; -the quality of the note will be reflected by the reception of the notes in file market; -a highly-rated company will offer notes with a better rate. {{I}} —Commercial papers/ bills:{{/I}} -a form of negotiable instrument issued by companies; -a promissory note, unsecured and with a maturity date; -comparatively high yield. {{I}} —The Exchange Fund Bills:{{/I}} -similar to the treasury bills issued in other countries; -investors earn no interest but receive a return based on the discount from their face value at maturity; -important investors are: licensed banks, deposit-taking companies, insurance companies, other financial companies and institutions; -advantages: highly liquid; strong credit standing; a large and expanding market. {{I}} —The Government Bond {{/I}} {{B}}Instruments traded in the international money markets:{{/B}} —Treasury bills. —Eurodollars. —Eurodollar certificates of deposits. Through local brokers and dealers who bring buyers and sellers together for a commission, one can easily get access to international money market instruments in Hongkong. {{B}}Capital markets:{{/B}} {{I}}Concept:{{/I}} —it is a market where long-term financial instruments with maturities of upwards of one year are traded. {{I}}General characteristics of the instruments:{{/I}} —greater risk; —less liquidity; —higher degree of default rate. {{I}}Types of instruments:{{/I}} —Credit instruments -they are issues by which a lender advances funds to a borrower in return for the borrower's IOU. —Equity instruments -they are issues by which investors supply permanent financing to firms or other borrowers including governments.