CHAPTER: - 9 MONEY MARKET AND CAPITAL MARKET OF INDIA Q.6. Distinguish between: 1. Money market and Capital market

Balbharati solutions for Economics HSC 12th Standard Maharashtra State Board

CHAPTER: - 9 MONEY MARKET AND CAPITAL MARKET OF INDIA

Q.6. Distinguish between:

1. Money market and Capital market.

Basic for comparison	Money market	capital market
Meaning	A segment of the financial market where lending and borrowing of short term securities are done.	A section of the financial market where long term securities are issued and traded.
Nature of Market	Money markets are informal in nature	Capital markets are formal in nature
Financial instruments	Treasury Bills, Commercial Papers, Certificate of Deposit, Trade Credit, etc.	Shares, Debentures, Bonds, Retained Earnings, Asset Securitization, Euro Issues, etc.
Risk Factor	Money markets have a low risk	Capital markets have more risk as compared to money markets
Return on Investment	ROI is usually low in money market	ROI is comparatively high in the capital market
Liquidity	Money markets are highly liquid	Capital markets are comparatively less liquid