Distinguish between Capital Market and Money Market.
Difference between capital market and money market:
Basis | Capital Market | Money Market |
---|---|---|
Meaning | It is a market dealing in securities for long-term funds. | It is a market dealing in securities of short-term funds. |
Duration | Period of maturity is more than one year. | Period of maturity ranges from one day to one year. |
Liquidity | Only actively traded securities enjoy liquidity. | In this market, there is a formal arrangement of creating liquidity. |
Safety Element | The transactions are made in the instruments issued by the financial institutions and financially strong companies. | In this market, securities of every company (big or small, financially weak or strong) are bought and sold. Hence, there is more risk involved. |
Instructions | Main instruments traded are shares, debentures, bonds, preference shares, etc. | Instruments traded are t-bills, commercial bills, Certificate of deposits, etc. |
Expected Returns |
The expected rate of return is less due to short duration. |
The expected returns are high and there is even a possibility of capital gain. |
NCERT questions are designed to test your understanding of the concepts and theories discussed in the chapter. Here are some tips to help you answer NCERT questions effectively:
Welcome to the NCERT Solutions for Class 12 Business Studies - Chapter . This page offers a step-by-step solution to the specific question from Excercise 2 , Question 3: Distinguish between Capital Market and Money Market.....
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