Q.4 (iv) Money Market and Capital Market
Best answer
Answer:
| Points | Money Market | Capital Market |
|---|---|---|
| Meaning | Market for short-term funds (up to one year). | Market for medium and long-term funds (more than one year). |
| Instruments | Treasury bills, commercial paper, certificates of deposit, call money, commercial bills. | Shares, debentures, bonds and other long-term securities. |
| Participants | RBI, commercial banks, financial institutions, large companies. | Companies, individual investors, mutual funds, FIIs, financial institutions. |
| Purpose | Meets working capital (short-term) needs. | Meets fixed capital (long-term) needs. |
| Risk and return | Low risk and low return. | Higher risk and higher return. |
| Liquidity | Instruments are highly liquid. | Instruments are less liquid. |
| Regulator | Regulated mainly by the Reserve Bank of India. | Regulated mainly by SEBI. |
Log in or create a free account to answer this question.
