Key Differences in Financial Markets
What are the key differences between the Money Market and Capital Market?
1. Which market enables the growth of the potential economy and provides long term debts?
2. Which market gets liquidated early and provides short term loans?
Key Differences between Money Market and Capital Market
1. The Capital Market enables the growth of the potential economy and provides long term debts with a low interest rate that is essential for a company to raise funds.
2. The Money Market, on the other hand, gets liquidated early and provides short term loans.
The financial market is an area where people can trade their shares, derivatives, and securities for a low price, including stocks, bonds, short and long term debts. The major function of the financial market is to enable financial transactions and help maintain stable prices.
The Capital Market plays a crucial role in enabling the growth of the potential economy by providing long term debts at a low interest rate, which allows companies to raise necessary funds for expansion. On the other hand, the Money Market deals with liquidating assets early and offering short term loans to participants.
Understanding the differences between the Money Market and Capital Market is essential for investors and companies alike to make informed decisions and utilize the financial market effectively.