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Differentiate between capital market and money market on following basis : 1. Participants, 2. Instruments, 3. Duration

Answer»

​​​​​​ Following table shows distinction between capital market and money market:

 
Basis of DistinctionCapital MarketMoney Market
(i) ParticipantsIts participants are financial institutions, banks, corporate entities, foreign investors.Its participants are Reserve Bank of India, banks, financial institutions and finance companies.
(ii) InstrumentsIts main instruments are equity shares, debentures, bonds, preference shares etc.Its main instruments are Tbills, trade bills, commercial paper and certificate of deposit.
(iii) DurationIt deals in medium and long-term securities.It deals in short-term (less than one year) securities.


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