CBSE Class 12 Business Studies - Capital Market vs Money Market

Capital Market vs Money Market

Important Differences

Basis	Capital Market	Money Market
1. Participants	Individual 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 Traded	Bonds, Debentures, Equity Shares, Preference Shares etc.	Commercial Papers, Treasury Bills, Certificates of Deposits etc.
3. Investment Outlay	Value 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 Instruments	Comparatively less liquid	Highly liquid
5. Safety	More risky.	Less risky because instruments of money market are highly secure due to soundness of issuer.
6. Duration of Securities traded	Medium or long term funds	Short term funds upto one year.
7. Expected Return	Higher returns on investment	Low returns