Give the meaning of 'Money Market'. Differentiate between 'Money Market' and 'Capital Market' on the basis of the following: (a) Instruments (b)…

Money market is a market for short term funds which deals in monetary assets whose period of maturity is up to one year. Difference between Money Market and Capital Market

Basis	Money Market	Capital Market
(a) Instruments	Main instruments are treasury bills, trade bills, commercial paper and certificate of deposit	The main Instruments are equity shares, debentures, bonds, preference shares, etc.
(b) Liquidity	Money market instruments are more liquid as compared to capital market.	Capital market investments are considered liquid investments as they are marketable on the stock exchanges.
(c) Safety	Money market instruments are much safer due to short duration of investing and financial soundness of the issuers	Capital market instruments are riskier, both with respect to returns and principal repayment