Similarities Between Money And Capital Market

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In today’s Store Management class, we will be learning about Similarities Between Money And Capital Market 

Similarities Between Money And Capital Market 

money and capital market

In the money market, we can find instruments traded in the money market which include Treasury bills, certificates of deposit, commercial paper, federal funds, bills of exchange, and short-term mortgage-backed securities and asset-backed securities.

Now, let’s consider the differences between Capital Market and Money Market 

  • Both are important components of the international finance market
  • Both markets permit investors to purchase debt securities
  • Businesses and governments depend on both the markets for raising money for operations

Borrowing and lending money in a money market occurs simply and easily with a payback guarantee. The capital market does not provide borrowing or lending money. The money market borrowing and lending can be taken or given over billions of rupees for a short time of period. The capital market borrowing or lending money is done through buying or selling bonds and stocks for a long term of time over billions of rupees. 

The capital fund is given by the supplier of capital in terms of buying financial bonds and stocks from the one who needs the money. Both the capital and money market exchange a large number of capital funds. Lenders and borrowers are lending and borrowing the short-term capital funds with short-term security. The capital market allows borrowing and lending a large amount of money for a long term of time with long-term security. The capital market gives the opportunity for borrowing and lending a large amount of money for a long term of time with a long-term security.

Both the money and capital markets facilitate participants to buy debt securities. Debt securities are financial products where the borrower promises the lender to pay back the debt amount. Other types of money markets and securities are also exchanged in the capital market. A high amount of rupees is exchanged daily in both types of markets. The expanded activities of the government or any business activity is paid for through lending money from both types of markets. Even the capital needed for operations of government or business is sometimes borrowed from both types of markets depending on the time. Both the markets do not exchange stocks and bonds offline or hand to hand. These usually exchange money through some particular online platforms.

Capital markets are long-term investments and provide purchase debt securities. The governments and businesses are dependent on both markets for getting the needed money for operations.

In summary, Both the capital and money market are very important aspects of the international market. Though there are many differences between both types of markets, both markets provide the facilities to get or use capital funds based on participants’ interests. Lending or borrowing money from the capital market will give a long period to pay back the money. The money market does not provide a long period but provides as large capital as the capital market. Stocks and bonds can be bought in both types of the market with debt security for a particular period.



Define Money Market 


Reading Assignment

Define Capital Market 


Weekend Assignment

Identify five differences between Money Market And Capital Market 


We hope you enjoyed today’s class. In our next class, we will be talking about Introduction To Taxation.

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