CBSE Class 12 Business Studies 2022 Outside Delhi set 2

© examsnet.com
Question : 6
Total: 6
Differentiate between 'Capital Market' and 'Money Market' on the basis of following:
(i) Participants
(ii) Instruments
(iii) Expected Return
(iv) Safety
(v) Duration
Solution:  
 Basis  Capital Market  Money Market
 Participants  Financial institutions, banks, corporations, foreign investors, etc.  RBI, large corporations
 Instruments  Equities, notes, bonds, debentures, mutual funds, etc  T-bills, Call money, Commercial Bills, Commercial Paper, Certificate of Deposits, etc.
 Expected Return  Returns vary with changes in prices and are available immediately following sale of transactions  Returns are fixed and available after maturity period
 Safety  Subject to risk and volatility  RBI regulates the market and is considered to be safer than capital market
 Duration  Used for long-term basis for assets with maturity greater than a year  Used for short-term basis for assets with maturity up to one year
© examsnet.com
Go to Question: