Key differences between money market and capital market
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The key differences are the following:
1. Capital markets are also known as the cash markets where investment takes place and profits are obtained, whereas money markets deal with debt instruments where lending of money is done to the government or companies to fulfill their short term money requirements.
2. Capital markets are high risk instruments because investment can drop down to zero if companies perform poorly on the other hand cash markets are safer and low risk instruments.
3. Capital markets are giving relatively high returns than other instruments in form of dividends whereas cash markets give relatively low returns, in form of Coupon rates, interest rate etc.
1. Capital markets are also known as the cash markets where investment takes place and profits are obtained, whereas money markets deal with debt instruments where lending of money is done to the government or companies to fulfill their short term money requirements.
2. Capital markets are high risk instruments because investment can drop down to zero if companies perform poorly on the other hand cash markets are safer and low risk instruments.
3. Capital markets are giving relatively high returns than other instruments in form of dividends whereas cash markets give relatively low returns, in form of Coupon rates, interest rate etc.
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