Differentiate between 'Capital Market' and 'Money

Market 'on the basis of :

(i)

Participants

(ii)

Instruments

(iii)

Investment Outlay

(iv)

Duration

(v)

Liquidity

Differentiation between capital market and money market:

	Basis	Capital Market	Money Market
(i)	Participants	The participants are financial institutions, banks, corporate entities, foreign investors and retail investors.	The participants are institutional participants such as the RBI, banks, financial institutions and finance companies.
(ii)	Instruments	The main instruments are equity shares, debentures, bonds, preference shares etc.	The main instruments are short-term debt instruments such as T-Bills, Trade Bills, Commercial Paper and Certificates of Deposit.
(iii )	Investment outlay	Investment in securities does not necessarily require a huge financial outlay as the value of units of	In the money market transactions entail huge sums of money as the
		securities is generally low.	instruments are quite expensive.
(iv)	Duration	It deals in medium and long-term securities such as shares and debentures.	It deals in instruments that have a maximum tenure of one year.
(v)	Liquidity	Capital market Securities are considered comparatively less liquid investments because a share, though marketable on stock exchanges may not be actively traded.	Money market instruments enjoy a higher degree of liquidity as there is formal arrangement for this.

(iii Investment Investment in In the money ) outlay securities does not market