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The key distinguishing feature between the money and capital markets is the maturity period of the securities traded in them. The money market refers to all institutions and procedures that provide for transactions in short-term debt instruments generally issued by borrowers with very high credit ratings. By financial convention, short-term means maturity periods of one year or less. Notice that equity instruments, either common or preferred, are not traded in the money market. The major instruments issued and traded are U.S. Treasury bills, various federal agency securities, bankers" acceptances, negotiable certificates of deposit, and commercial paper. Keep in mind that the money market is an intangible market. You do not walk into a building on Wall Street that has the words "Money Market" etched in stone over its arches. Rather, the money market is primarily a telephone and computer market.
The capital market refers to all institutions and procedures that provide for transactions in long-term financial instruments. Long-term here means having maturity periods that extend beyond one year. In the broad sense, this encompasses term loans and financial leases, corporate equities, and bonds. The funds that comprise the firm's capital structure are raised in the capital market. Important elements of the capital market are the organized security exchanges and the over-the-counter markets.
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∙ 14y ago
Wiki User
∙ 15y agoCapital market is a market which includes securities with maturity period more than one year but bond market includes securities with fixed interest rate i.e. securities with fixed rate of return irrespective of any time limit of maturity.
Wiki User
∙ 14y agoThe key distinguishing feature between the money and capital markets is the maturity period of the securities traded in them. The money market refers to all institutions and procedures that provide for transactions in short-term debt instruments generally issued by borrowers with very high credit ratings. By financial rule, short-term means maturity periods of one year or less. While the capital market refers to all institutions and procedures that provide for transactions in long-term financial instruments. Long-term here means having maturity periods of more than one year (Keown - Martin - Petty - Scott, 2005, p. 486).
Wiki User
∙ 9y agoA capital market is a market that is for the trading of financial securities between buyers and sellers. Whereas a securities market is a market where securities trading is done by stockbrokers.
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∙ 13y agoMoney market is primarily a market for short term funds. Generally the maturity is within an year and more commonly it is overnight. The types of securities traded in money market are
Treasury Bills
Commercial Papers
Repos
Bankers Acceptance etc
This market is primarily for banks and other primary dealers.
On the other hand Capital market is a long term financial market and generally the following securities are involved
Bonds
Stocks
There is a primary market and secondary markets for capital markets. Companies participate in capital markets to secure funds for their capital expansion etc..
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∙ 10y agoMoney market is a short term (normally securities issued for a period of 360 (365)days or less.) whereas the capital market securities have longer life span.. in some cases like equity perennial.
Wiki User
∙ 11y agoCapital market is stock exchange. It trades stocks and bonds.
Money market's main object of trading is curency.
Wiki User
∙ 11y agoWiki User
∙ 11y agoThe money market deals in the lending and borrowing of short-term finance
capital market deals in the lending and borrowing of long-term finance
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Who are the capital market and money market operators?
who are the operators of money market and capital market
Is a preferred stock a money market or a capital market?
capital market
Is dealer commercial paper money market or capital market?
Money Market
What are financial markets?
A market for the exchange of capital and credit, including the money market and the capital market.
What is the difference between derivatives and capital market?
What is the difference between capital market and money market?" == == The capital market Deals with long term funds.But the money market deals with short term funds. CM is Government controlled, but MM is Central Bank controlled CM - Return of capital is determined by demand/supply of short term funds. But, in the MM, Interest rate is determined by demand/supply of capital. CM Instruments-Shares, Debentures. PM instruments - Cheques,promissory bonds,etc. notes,Govt.Bonds CM - Provides fixed capital . MM - provides working capital CM - Capital Market MM- Money Market FINE?
Inter relation between money market and capital market?
Relationship between Money Market and Capital Market:a) Capital market is a market for financial assets which have a long or indefinite maturity and money market is the mechanism whereby funds are obtained for short periods of time (from one day to one year).b) Two markets are inter-related. They will buy treasury bills at relative.c) In Money Market, short-term funds are used whereas the Capital Market deals in long term fund required.d) Capital Market is not as sensitive to change in demand and supply as are the money market components.e) Change of interest rate in both market affect each other.f) Money markets facilitate the sale of short-term securities, while capital markets facilitate the sale/buy of long term securities.Prepared byMd. Al-mamun,MBA, 26th Batch, ID: 2023Prime UniversityBangladesh
What are the principal money market and capital market instrument available to the bank in Bangladesh?
What are the Capital Market Securities of Bangladesh
What is money and capital market?
What is capital market? Basically the capital market is a type of financial market, it includes the stocks and bonds market as well. But in general the capital market is the market for securities where either companies or the government can raise long term funds What is the money market? Basically the money market is the global financial market for short-term borrowing and lending and provides short term liquid funding for the global financial system. The average amount of time that companies borrow money in a money market is about thirteen months or lower
Describe the nature and functions of money market and capital market?
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What are four markets for financial assets?
Capital Market, Money Market, Primary Market and Secondary Market.
Why is money not considered capital in economics?
Capital is a physical asset which can be used to produce goods and services. Money is related to capital, in that it can be used to purchase capital, but it is not itself capital. The distinction is important if you consider that money can be created or destroyed through the expansion or contraction of credit, but this does not create or destroy any real capital. Money is capital. Money is the most common form of capital. Raising capital i.e. money for investment is a common practice.
How the international capital market helps reduce risk for lender?
Capital Market related with the money lend from the bank and help
