Money Market
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Capital Markets
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Money market is that type of securities market where short term securities, having maturity period equal or less than one year, are traded.
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Capital market is that type of securities market where long term securities, having more than one year maturity period, are traded.
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The securities traded in money market have low risk and provide low return.
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The securities traded in capital market have higher risk and provide high return.
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The securities traded in money market are highly liquid.
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The securities traded in capital market are not highly liquid as compared to money market instruments.
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Money market facilitates the flow of short term fund.
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Whereas capital market facilitates the flow of long term fund.
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The participants of money market are short term deficit units and surplus units (Government, business and household).
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The participants of capital market are long term deficit units and surplus units (Government, business and household).
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The securities which are traded in money market are treasury bills, commercial papers, certificate of deposit, certificate of euro-dollar deposit etc.
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The securities which are traded in capital market are common stock, preferred stock, corporate bonds, treasury bonds etc.
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