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MONEY MARKET
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CAPITAL MARKET
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Meaning
A Market where short term
funds are borrowed and lend.
Term of Finance
It provides short term funds, in short term instruments where the
maturity is measured in days, weeks, or months.
Instruments
The instruments dealt in the market are bills of exchange, treasury
bills, banker's acceptance, etc.
Functions
Money market exists as a mechanism of liquidity adjustments i.e. a
link between the depositors and borrowers.
Risk
The prices of these instruments do not fluctuate and they carry very
low market risk.
Institution
The commercial banks are the important institutions in the money
market.
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A market for borrowing and lending long term capital required by
business enterprise.
It is a market for long tern instruments which is measured in years.
The instruments dealt in this market are bonds, debentures, equity
shares and stock.
Capital market functions as a link between the investors and
entrepreneurs.
The instruments are long term and subject to market fluctuations and
so they carry very high financial and market risk.
The stock exchange is an important institution in the Capital Market.
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MONEY MARKET CAPITAL MARKET
