Thursday 22 September 2016

CBSE Class 12 Business Studies - Capital Market vs Money Market

Capital Market vs Money Market

CBSE Class 12 Business Studies - Capital Market vs Money Market

Important Differences

BasisCapital MarketMoney Market
1. ParticipantsIndividual Investors, Financial Institutions, Banks, Foreign Investors, Corporate Groups etc.reserve Bank Of India, Commercial Banks, Financial Institutions, Mutual Fund Houses, Corporate Groups. Individual Investors are not allowed to participate.
2. Instruments TradedBonds, Debentures, Equity Shares, Preference Shares etc.Commercial Papers, Treasury Bills, Certificates of Deposits etc.
3. Investment OutlayValue of units of security is low, t does not require huge financial outlay.
Instruments are quite expensive, transactions entail huge sums of money.
4. Liquidity of InstrumentsComparatively less liquidHighly liquid
5. SafetyMore risky.Less risky because instruments of money market are highly secure due to soundness of issuer.
6. Duration of Securities tradedMedium or long term fundsShort term funds upto one year.
7. Expected ReturnHigher returns on investmentLow returns

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