What is the difference between the money market and the capital market?

[Sehrish]

A money market is a component of financial market where short-term borrowing can be issued.
A capital market is a component of a financial market that allows long-term trading of debt and equity-backed securities

 

[chicnthin]

The difference is, money market is being used for a year or less, in other words, short term transactions and offers safer risk but its return are lower. Capital market allows long term trading of debts and is riskier but its return is higher. The former has instruments of treasury bills, certificate of deposit while the latter includes stocks and bonds.

 

[Tiwa]

Money market is trading in short term financing that ranges from 3 months to a maximum of 12 months. While Capital market is foe debt financing on a long term basis . Bonds, stocks are traded in the capital market .We have companies, professional brokers trade in this type of market.

 

[Kelvin7656]

The money market and the capital market are not single institutions but two broad components of the global financial system.

• The money market is the trade in short-term debt. It is a constant flow of cash between governments, corporations, banks, and financial institutions, borrowing and lending for a term as short as overnight and no longer than a year.
• The capital market encompasses the trade in both stocks and bonds. These are long-term assets bought by financial institutions, professional brokers, and individual investors.

Together, the money market and the capital market comprise a large portion of what is known as the financial market.

 

[Lyrrex]

If I tell you that I don't know this thing now you come and start laughing at me, well I'm not a business and economics train so I don't know the difference between those two , I'm also waiting patiently to learn from experts, still following.

 

[BrolySSJ]

There are actually many difference between money market and capital market the main is just that money market is a market which deals with short term securities whereas the capital market deals mainly with long or medium term securities acquisition.

Thank you for explaining this. I myself was also very confused when it came to the difference between these two and I did not understand it fully. When you are talking about securities are you referring to the term of the investment that you are making, which is long and short term investments?

 

[Goodday]

Thank you for explaining this. I myself was also very confused when it came to the difference between these two and I did not understand it fully. When you are talking about securities are you referring to the term of the investment that you are making, which is long and short term investments?

Yeah, when we are talking about securities, we are just referring to the various assets like shares, government bonds or any bond, treasury bills and other forms of stocks. With all these you can choose to do short term investment with some like the shares and you can also do the long term investment with the bonds.

 

[BrolySSJ]

Yeah, when we are talking about securities, we are just referring to the various assets like shares, government bonds or any bond, treasury bills and other forms of stocks. With all these you can choose to do short term investment with some like the shares and you can also do the long term investment with the bonds.

This makes a lot of sense thank you very much for explaining this to me in so much detail. I do have a bit of background knowledge when it comes to bins and what not so linking it to bonds was very helpful for my in understanding it.

Post automatically merged: Jan 11, 2021

*bonds not bins. Sorry that was a typo that I realized after I had sent the response.

 

[Snobar Bilal]

There are many differences between the capital market and money market. Both are deals with securities. Money market is a market which deals with shor term investment and security and capit al market is a market which deals with the mid term and long term investment and securities.

 

[Heatman]

From my analysis so far, I can discern that both money market and capital market are quite promising in terms of profit but for some obvious reasons I'm more interested in capital markets. Maybe it's because of the success I have had in it in the past.

 

[Ehtisham memon]

Many difference between money market and capital market money market with short term sell and cost and capital market dealing between two or more market under in

 

[Klashlly]

The different between money market and capital market
The money market is the trade in short-term debt. ... The capital market encompasses the trade in both stocks and bonds. These are long-term assets bought by financial institutions, professional brokers, and individual investors

 

[Heatman]

The different between money market and capital market
The money market is the trade in short-term debt. ... The capital market encompasses the trade in both stocks and bonds. These are long-term assets bought by financial institutions, professional brokers, and individual investors

Personally, I find long term investment more lucrative than short term investments. They have a way of giving you better credit return on your investments. The only problem is that most people need their payment a little more faster and as such they hardly go into long term investments.

 

[Oliver 20]

The money market is the trade in short-term debt.The capital market encompasses the trade in both stocks and bonds. These are long-term assets bought by financial institutions, professional brokers, and individual investors.

 

[Abibatabosede]

The major difference between money market and capital markets is that money market deals with small term investment while the capital market deals basically with long term investment security like stock, shares and so on.

 

[Heatman]

The money market is the trade in short-term debt.The capital market encompasses the trade in both stocks and bonds. These are long-term assets bought by financial institutions, professional brokers, and individual investors.

Investment in stocks keeps getting popular lately. It seems like people are now beginning to understand the benefits of investing in stocks because as long as the company is doing well, you are bound to get good return on your investment.

 

[Chris]

The money market is the trade in short-term debt like Treasury Bills with an original maturity of less than one year. While the capital market encompasses the trade in both stocks and bonds with an original maturity of more than one year or irredeemable.

 

[Seun4luv]

Money market are used for short-term lending or borrowing usually the assets are held for one year or less whereas, are used for long-term they have a direct or indirect impact on the capital. Capital market include the equity markets and the debt marker.

 

[Virgo25]

Money markets are used for short-term lending or borrowing usually the assets are held for one year or less whereas, Capital Markets are used for long-term securities they have a direct or indirect impact on the capital. Capital markets include the equity market and the debt market.

 

[Blue house]

The money market is the exchange momentary obligation. ... The capital market envelops the exchange the two stocks and securities. These are long haul resources purchased by monetary establishments, proficient intermediaries, and individual speculators.