Basis for Money Market Capital Market

comparison

Meaning
A segment of the financial market A section of financial market
where long term securities are
where lending and borrowing of issued and traded.
short term securities are done.

Financial Treasury Bills (T-Bills), Bonds, Debentures, Equity shares,

Instruments Negotiable Certificate of Deposits Preference shares,
(NCDs), Commercial Papers,
Banker’s Acceptance,
Repurchase, Eurodollars

Organizations Financial bank, central bank, The stock exchange, commercial

commercial bank, non-financial banks, non-banking organizations
institutions, bill brokers, like insurance companies etc.,
acceptance houses, and so on.

Nature of Informal Formal

Market

Liquidity High Low

Maturity period Within a year More than a year

Risk Factor Low Comparatively high

( Since the market is liquid and ( Due to the less liquid nature and
the maturity is less than 1 year ) long maturity )

Purpose To achieve short term credit To achieve long term credit

requirements of the trade. requirements of the trade.

Functional Merit Rises liquidity of capitals in the Mobilization of Economies in the

market. market.

Return on Less High

Investment