A financial market allows people and entities to trade financial securities, commodities, and other assets at low cost. It sets prices through supply and demand. The money market involves short-term borrowing and lending of up to one year for assets like treasury bills and certificates of deposit. The capital market provides long-term funding for companies and governments through securities like stocks and bonds, with funds provided for over one year. Both markets help balance short-term surpluses and deficits while giving access to funds.