Question

What is Money Market ? Distinguish between Capital Market and Money Market.

Answer 1

■This includes assets such as certificates of deposit (CDs), interbank loans, money market funds, Treasury bills (T-bills), repurchase agreements, commercial paper and short-term securities loans. The Federal Reserve Board tracks money markets through its flow of funds survey.

■Money market and Capital market are types of financial market. Money markets are used for short-term lending or borrowing usually the assets are held for one year or less whereas, Capital Markets are used for long-term securities they have the direct or indirect impact on the capital

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Answer 2

Money market basically refers to a section of the financial market where financial instruments with high liquidity and short-term maturities are traded.

Money markets are used for short-term lending or borrowing usually the assets are held for one year or less whereas, Capital Markets are used for long-term securities they have a direct or indirect impact on the capital. Capital markets include the equity market and the debt market.