CBSE Class 12 Business Studies 2023 Outside Delhi set 2

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Question : 9
Total: 11
Distinguish between 'Capital Market' and 'Money Market' on the basis of following:
(i) Participants
(ii) Safety
(iii) Investment Outlay
(iv) Expected Return
Solution:  
Difference between 'Capital Market' and 'Money Market'.
 Basis  Capital Market  Money Market
 (i) Participants  Financial institutions, Banks, Corporate entities, Foreign Investors, ordinary retail investors and individuals.  RBI, Banks, Financial institutions and finance companies. (Not including foreign and ordinary retail investors)
 (ii) Safety  Capital Market Instruments are riskier with respect to return and principle repayment.  Money Market Instruments are generally much safer with a minimum risk of default.
 (iii) Investment Outlay  Does not require a huge financial outlay.  Entails huge sum of money as the instruments are quite expensive.
 (iv) Expected Return  High return is seen in Capital market instruments.  Low return is seen in Money market instruments.
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