Question

Distinguish between 'Capital Market' and 'Money Market' on the basis of:
(i) Liquidity
(ii) Investment outlays
(iii) Participants
(iv) Safety
(v) Instruments.

Answer 1

Basis	Capital market	Money market
Liquidity	Capital market securities are considered liquid because of stock exchange but compared to money market instruments these are less liquid.	Money market securities enjoy higher degree of liquidity.
Investment outlays	The investment in capital market does not require huge financial investment	The money market instruments are quite expensive so huge financial investment is required.
Participants	Thee participants of capital market are financial institutions, banks, public and private companies, foreign and ordinary retail investors from public.	Thee participants of money market are banks, private and public companies but foreign and ordinary retail investors do not participate in money market.
Safety	The instruments of the capital market are riskier .	The instruments in the money market are safe and less risky due to short duration.
Instruments	The instruments dealt in this market are bonds, debentures, equity shares and stock.	The instruments dealt in the market are bills of exchange, treasury bills, banker's acceptance, etc