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Business Studies · 2023 · 4 marks
CBSE 2023 · Region 2 · Set 3 · Q28
Distinguish between ‘Capital market’ and ‘MoneyMarket’ on the basis of following:(i)Duration(ii)Liquidity(iii)Safety(iv)Investment Outlay
Distinguish between ‘Capital market’ and ‘Money
Market’ on the basis of following:
(i)
Duration
(ii)
Liquidity
(iii)
Safety
(iv)
Investment Outlay
Marking-scheme solution
‘Capital market’ and ‘Money
Distinction between
Market’
| Basis | Capital Market | Money Market | |
| (i) | Duration | Capital market deals in medium term and long term securities. | Money market securities have a maximum tenure of one year. |
| (ii) | Liquidity | Capital market securities are comparatively less liquid as a share may not be actively traded or may not easily find a buyer. | Money market instruments enjoy a higher degree of liquidity as there is a formal agreement for this. |
| (iii) | Safety | Riskier as issuing companies may fail to perform or defraud investors. | Much safer with a minimum risk of default. |
| (iv) | Investment outlay. | Does not necessarily require a huge financial outlay as the value of units of securities is generally low. | Transactions entail huge sums of money as the instruments are quite expensive. |
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CBSE Class 12 Business Studies past-paper question from the 2023board exam, with the answer as CBSE’s own marking scheme gives it. Where our answers come from.