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    The document discusses the financial, money, and capital markets. It defines the money market as enabling short-term borrowing and lending of up to one year through instruments like treasury bills, commercial bills, and promissory notes. The capital market aids in long-term fundraising over one year through bond and stock markets. Key differences are that the money market involves more liquid, lower risk, and shorter term loans for fulfilling short-term credit needs, while the capital market offers higher returns but is less liquid and involves higher risk through longer term investments that stabilize the economy. Both markets are important for meeting business financing needs.

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    Money market and Capital Market

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    The document discusses the financial, money, and capital markets. It defines the money market as enabling short-term borrowing and lending of up to one year through instruments like treasury bills, commercial bills, and promissory notes. The capital market aids in long-term fundraising over one year through bond and stock markets. Key differences are that the money market involves more liquid, lower risk, and shorter term loans for fulfilling short-term credit needs, while the capital market offers higher returns but is less liquid and involves higher risk through longer term investments that stabilize the economy. Both markets are important for meeting business financing needs.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    17 views14 pages

    Money Market and Capital Market

    Uploaded by

    natalie clyde mates
    The document discusses the financial, money, and capital markets. It defines the money market as enabling short-term borrowing and lending of up to one year through instruments like treasury bills, commercial bills, and promissory notes. The capital market aids in long-term fundraising over one year through bond and stock markets. Key differences are that the money market involves more liquid, lower risk, and shorter term loans for fulfilling short-term credit needs, while the capital market offers higher returns but is less liquid and involves higher risk through longer term investments that stabilize the economy. Both markets are important for meeting business financing needs.

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    © All Rights Reserved
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    of 14

    Financial Market

    Browser

    Money Market
    and Capital
    Market
    Abellon, Arthea Chaile C.

    Page 01 12:01 PM
    What You Will Learn

    Financial Market

    Contents Types of Financial Market

    Money Market and Capital


    Market Definition

    Introduction of Primary and


    Secondary Market

    Money Market VS. Capital


    Market

    Page 02 12:01 PM
    FINANCIAL
    MARKET
    Financial Market refers to the
    marketplace where the activities
    related to the creation and trading
    of the different financial assets
    such as bonds, shares, commodities,
    currencies, derivatives etc takes
    place and it provides the platform
    to sellers and buyers of the
    financial assets to meet and trade
    with each other at a price as
    determined by market forces.

    Page 03 12:01 PM
    FINANCIAL MARKET

    Page 04 12:01 PM
    MONEY
    MARKET

    CAPITAL
    MARKET
    Page 05 12:01 PM
    The money market enables economic
    units to manage their liquidity
    MONEY MARKET
    positions through lending and
    borrowing short-term loans,
    generally under 1 year.
    Instrument of Money
    Market
    Treasury Bills
    Commercial Bills
    No such market exist Money at call
    physically; the transactions Promissory Notes

    are performed over a virtual


    network, i.e. fax, internet or
    phone.

    Page 06 12:01 PM
    The capital market aids CAPITAL MARKET
    raising of capital on a
    long-term basis, generally
    over 1 year.
    2 MAIN SUBGROUPS
    BOND MARKET
    2 TYPES STOCK MARKET
    PRIMARY MARKET
    SECONDARY MARKET

    Page 07 12:01 PM
    DIFFERENCES

    MONEY S
    .. CAPITAL
    S
    MARKET V
    V MARKET

    Page 10 12:01 PM
    Money Market Capital Market

    SHORT-TERM UP MEDIUM-TERM

    SUSREV
    TO ONE YEAR AND LONG TERM

    PROMISSORY NOTES , BILLS


    OF EXCHANGE, DEALS IN EQUITY SHARE,
    COMMERCIAL PAPER, T BILL, DEBENTURES, BONDS,
    CALL MONEY, ETC. PREFERENCE SHARES, ETC.

    THE MONEY MARKET CONTAINS IT INVOLVES STOCKBROKERS, MUTUAL


    FINANCIAL BANKS, THE CENTRAL FUNDS, UNDERWRITERS, INDIVIDUAL
    BANK, COMMERCIAL BANKS, INVESTORS, COMMERCIAL BANKS,
    FINANCIAL COMPANIES, CHIT STOCK EXCHANGES, INSURANCE
    FUNDS, ETC. COMPANIES

    Page 11 12:01 PM
    Money Market Capital Market

    COMPARATIVELY
    LIQUID

    SUSREV
    LESS LIQUID
    THE MATURITY OF CAPITAL
    THE MATURITY OF MARKETS INSTRUMENT IS
    FINANCIAL INSTRUMENTS IS LONGER AND THEY DO NOT
    GENERALLY UP TO 1 YEAR HAVE STIPULATED TIME
    FRAME.

    LOW RISK HIGH RISK

    Page 12 12:01 PM
    Money Market Capital Market

    THE MARKET FULFILLS THE MARKET FULFILLS


    THE SHORT-TERM THE LONG-TERM

    SUSREV
    CREDIT NEEDS OF THE CREDIT NEEDS OF THE
    BUSINESS BUSINESS

    INCREASE THE LIQUIDITY OF STABILIZES THE ECONOMY


    FUNDS IN THE ECONOMY DUE TO LONG-TERM
    SAVINGS

    THE RETURN IN THE RETURNS IN


    MONEY MARKETS ARE CAPITAL MARKETS
    USUALLY LOW ARE HIGH

    Page 13 12:01 PM
    ADDITIONAL
    Both are part of the financial markets.
    Both are required for the betterment of the
    economy as they fulfill the long-term and
    short-term capital needs of the business and
    industry.
    Investors can tap into each of the markets
    depending on their needs.
    due to market anomalies and inefficiency due
    to some aberrations above may not hold.
    WHAT IS
    BETTER THE
    MONEY
    MARKET OR
    CAPITAL
    MARKET?
    THANK
    YOU!

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