Write any four differences between Capital Market and Money Market. long answer type question
Answers
Answer:
A financial market is a place where buyers and seller come together to trade in financial assets such as bonds, stocks, derivatives, currencies, and commodities. The main objective of a financial market is to fix prices for global trade, increase capital, and transfer risk and liquidity.
Thought the financial market has various components, the two most important components are the money market and capital market. In the money market, only short-term liquid financial instruments are exchanged. Whereas, in the capital market only long term securities are dealt.
Capital Market plays a significant role in the growth of country’s economy as it provides a platform for mobilizing the funds. Similarly, the money market holds a range of operational characteristics. The article will explain what is the difference between money market and capital market.
Answer:
A capital market is a component of a financial market that allows long term trading of debt and equity backed securities.capital market offers higher risk investment , while money market returns are often low but steady . while capital markets offer higher return .