Difference between Money Market and Capital Market – Financial Market | Finanace
February 3, 2017 |
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. |
