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Difference between Capital Market and Money Market


Now onward every Tuesday I will publish a post in which difference of two terms are discussed.
Let's start today's post in which I will discuss "Difference between Capital Market and Money Market".
Point of Difference
Capital Market
Money market
1.
Meaning of Capital Market and Money Market
It is a market in which buying and selling of long term securities to 
It is a market in which new shares are issued.
2.
Duration of a financial securities
The duration of the financial securities is more than one or two year.
The duration of the financial securities is less than a year.
3.
The risk factor in market
The risk factor is high in capital market because long term securities are traded and they are not easily converted into cash.
The risk factor is low in money market because short term securities are traded and they are easily converted into cash.
4.
The return factor in both the market
The return factor is high in capital market.
The return factor is high in money market.
5.
The liquidity factor in both the market
The liquidity factor is low in capital market because securities are traded for long term purpose so the securities are mature after one or two years.
The liquidity factor is high in money market because securities are traded for short term purpose so, it can easily converted into cash.
6.
Participants in capital market and money market
The main participants in capital market are mutual fund company, financial institutions, corporate company , underwriters etc.
The main participants in money market are central bank, public sector bank and financial institution etc.
7.
The securities traded in capital market and money market
The securities traded in capital market are – debentures, share capital, bonds etc.
The securities traded in money market are – treasury bills, bill of exchange, certificate of deposits, commercial paper etc.
8.
The division of capital market and money market
The capital market is divided into two parts that is primary market and secondary market.
The money market is divided into two parts that is organised sector and un-organised sector
9.
The objective of the capital market and money market
The main objective of capital market is to raise medium term and long term money through financial securities by big companies from public.
The main objective of money market is to raise capital through financial securities which are newly issued in this market by small companies so, that they are protected from competitions with established companies.
10.
The capital market and money market regulated by
The capital market is regulated by Stock Exchange Board of India (SEBI).
The money market is regulated by Reserve Bank of India (SEBI).
11.
The trading medium or place in capital market and money market
The capital market securities are traded in stock exchange.
The money market securities are traded through electronic system or on phone.
12.
The secured or unsecured instruments in capital market and money market
The financial securities traded in capital market are secured by assets.
The financial securities traded in money market are unsecured because they are not backed by any assets or collateral securities.



Comments

  1. Phani KumarJune 22, 2020 4:38 pm

    Hey, thanks for the information. your posts are informative and useful. I am regularly following your posts.
    Valencia Nutrition Ltd IPO

    ReplyDelete

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