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The College of Service Business , Sokolac - Istočno Sarajevo , Bosnia and Herzegovina
Independent University of Banja Luka , Banja Luka , Bosnia and Herzegovina
Serbian Chamber of Commerce , Belgrade , Serbia
The needs for long-term resources of economic entities can be met by generating their own accumulation or using the resources of other participants in reproduction. In the first case, it is about self-financing - investing retained earnings. In the second case, economic entities obtain capital by issuing debt or equity financial instruments to investors, owners of surplus capital, directly or through financial institutions. The transfer function, related to the use of long-term funds, is provided by the financial market segment - capital market. This market owes its name to the understanding that the funds that are returned to the investor in a longer period of time are capital, because they are used mainly for real investment, which provides an increase in income, ie an increase in social wealth in the long run. The aim of the research in this paper refers to the capital market, as one of the elements of the financial system, determined by financial instruments, as the material of financial transactions and financial institutions, as the main participants, ie. financial market transactions.
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