Shares/Stock What is the difference between the money market and the capital market?

[greenieS]

As the title suggests, what is the difference between the money market and the capital market?

There are a lot of people who don't understand the difference between these two: money market & capital market and I'm sure they would like to know what each one is about.

Money market is a market that deals in short term investments. Capital market focuses on the long term investment mostly. They both form the finance market of an economy.

Do you have a different opinion on this topic? What is the difference from your point of view?

 

[Deleted member 28127]

If the company is in a hard situation the most investors are going to deal with money market investment means waiting for the share price to go down then invest by sell but they would prefer capital market when it is an old company and they have a piece of good previous information and background then will go to the capital market so it depends from the situation.

 

[Oluwasegun purpose]

Money market is an institution or market for short term loans.in other words, it is a financial market which provides short term loan for investment purposes. Short term loan are those loans which repayment fall between few months and two years.
The institution involved in the money market are the central bank, commercial banks, merchant banks, discount houses, acceptance houses etc
The instrument of the money market;
1 Treasury bills
2 Treasury certificate
3 Bill of exchange
4 The call money market


The capital market is for both medium and long term loans.it is a market were people who need long term loans come in contact with owners of loanable funds, that is suppliers of such funds.in other words, the capital market provides long term loans for investment.loans given are for longer periods which is usually for more than two years..

The financial instrument used in the capital market to finance long term investment are stocks, share, bonds (company bonds and government bonds) and debenture. Limited liability companies, government and local authorities can raise revenue by issuing new stocks.

The capital market can be categorised into two. These are the primary market and the secondary market. The primary market deals with the buying and selling of new securities. The secondary market on the other hand deals with the selling and buying of old (second hand) securities.
This market is mostly dominated by the stock exchange....