Welcome to the NCERT Solutions for Class 12 Business Studies - Chapter Financial Markets. This page offers a step-by-step solution to the specific question from Exercise 2, Question 3:
Distinguish between Capital Market and Money Market.
. With detailed answers and explanations for each chapter, students can strengthen their understanding and prepare confidently for exams. Ideal for CBSE and other board students, this resource will simplify your study experience.Distinguish between Capital Market and Money Market.
Difference between capital market and money market:
| Basis | Capital Market | Money Market |
|---|---|---|
| Meaning | It is a market dealing in securities for long-term funds. | It is a market dealing in securities of short-term funds. |
| Duration | Period of maturity is more than one year. | Period of maturity ranges from one day to one year. |
| Liquidity | Only actively traded securities enjoy liquidity. | In this market, there is a formal arrangement of creating liquidity. |
| Safety Element | The transactions are made in the instruments issued by the financial institutions and financially strong companies. | In this market, securities of every company (big or small, financially weak or strong) are bought and sold. Hence, there is more risk involved. |
| Instructions | Main instruments traded are shares, debentures, bonds, preference shares, etc. | Instruments traded are t-bills, commercial bills, Certificate of deposits, etc. |
| Expected Returns |
The expected rate of return is less due to short duration. |
The expected returns are high and there is even a possibility of capital gain. |
NCERT questions are designed to test your understanding of the concepts and theories discussed in the chapter. Here are some tips to help you answer NCERT questions effectively:
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Welcome to the NCERT Solutions for Class 12 Business Studies - Chapter . This page offers a step-by-step solution to the specific question from Excercise 2 , Question 3: Distinguish between Capital Market and Money Market.....
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