Capital Market
- Provides long term finance
- Finance may be used for acquiring fixed assets or for financing hard core working capital requirements
- Lending and borrowing are for real business purpose, diversification, expansion, modernisation, mechani- sation programmes, etc.
- Underwriting may be insisted and often comes to the picture
- Capital market instruments are Government Securities, Industrial Securities and Long Term Loans
- Capital market instruments need not be liquid
- Capital market instruments do have risks
Money Market
- Provides short term finance
- Finance is mainly used for financing working capital requirements
- Lending and borrowing facilitate liquidity position of the individual or organisation
- Underwriting usually does not come to the picture
- Usual money market instruments are Treasury Bills, Certificate of Deposits, Commercial Paper and Repos
- Money-market instruments are highly liquid
- Money market instruments carry negligible risk
To read more about Capital Market 👇https://freebird.data.blog/2022/07/28/capital-market/
To read more about Money Market 👇https://freebird.data.blog/2022/07/27/money-market/
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