Question

Distinguish between 'Capital Market' and 'Money Market' on the following bases:
(i) Duration of securities traded
(ii) Participates
(iii) Instruments traded
(iv) Safety
(v) Expected return.

Answer 1

The major point of distinction are as follows:

Basis of Difference	Capital Market	Money Market
Duration of securities traded	More than a year	Within a year
Participates	Financial institutions,Banks,Foreign investors,Corporate entities etc.	RBI,Banks and financial institutions.
Instruments traded	Shares, Debentures, Bonds, Retained Earnings, Asset Securitization, Euro Issues etc.	Treasury Bills, Commercial Papers, Certificate of Deposit, Trade Credit etc.
Safety	Less secured	Comparatively more safer than capital market
Expected return.	Comparatively high	Less