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 |
