Differentiate between 'Capital Market' and 'Money Market' on the basis of the following: (i) Safety (ii) Expected Return
Differentiate between 'Capital Market' and 'Money Market' on the basis of the following:
(i) Safety
(ii) Expected Return
(iii) Investment outlay
(iv) Participants
(v) Duration.
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| Basis | Capital Market | Money Market |
| Participants | The participants are financial institutions, banks, corporate, foreign investors and retail investors. | The participants are RBI, financial institutions, banks, corporate. |
| Investment outlay | Investment outlay is small. | Investment outlay is large. |
| Duration | It deals in medium term and long term securities | It deals in short term securities |
| Expected return | The investment in capital markets generally yields a higher return | The expected rate of return of the money market is less. |
| Security/Safety | Capital market instruments are risky with respect to returns and principal repayment. | Money market instruments are generally much safer with a minimum risk of default |
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