Difference between Money Market and Capital Market – Financial Market | Finanace

Difference between Money Market and Capital Market
Financial market | Finance
BBA | BBA-BI |BBS | BHCM
Management Notes

S.No. Money  Market  Capital  Market
1.  Money market is one of the type of financial market where short term securities are traded. Capital market is one the type of financial market where long term securities are traded.
2. The securities traded in money market have life less than one year. The securities traded in capital market have life more than one year.
3. The securities traded in money market are highly liquid (can be easily converted into cash) as they have maturity period less than one year. The securities traded in capital market are less liquid (can be easily converted into cash) as they have maturity period more than one year.
4. The securities traded in money market are unsecured because they are issued without collateral(property or other asset that a borrower offers as a way for a lender to secure the loan.). The securities traded in capital market are secured because they are issued with collateral(property or other asset that a borrower offers as a way for a lender to secure the loan.).
5.  The money market instruments are Treasury bill, Commercial paper, bank deposit , Certificate of deposit(CD), etc. The capital market instruments are Common stock ,Preferred Stock, bond, debentures, etc.

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