1.

Distinguish between Money Market and Capital Market on the basis of: (a) Participants (b) Instruments (c) Duration and (d) Safety.

Answer»
BasisCapital MarketMoney Market
ParticipantsThe participants are financial institutions, banks, corporate, foreign investors and retail investors.The participants are RBI, financial institutions, banks, corporate.
Instruments Instruments traded are shares, debentures and bonds. Instruments traded are treasury bill, commercial paper, certificates of deposit, call money and commercial bill.
DurationIt deals in medium term and long term securitiesIt deals in short term securities
Security/SafetyCapital market instruments are risky with respect to returns and principal repayment.Money market instruments are generally much safer with a minimum risk of default


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