In: Finance
Money markets are financial markets where long-term debt and equity securities are bought and sold, while capital markets are financial markets where short-term debt securities are bought and sold. T or F
Sol:
Money markets are financial markets where long-term debt and equity securities are bought and sold, while capital markets are financial markets where short-term debt securities are bought and sold is F or False
Answer is F or False.
Money markets are financial markets where short-term debt and equity securities are bought and sold, while capital markets are financial markets where long-term debt securities are bought and sold. The securities in money market are for short term while the securities are for longer term in capital markets. Money market consist of trading in short term securities such as Treasury Bills, Commercial Papers, Trade Credit etc, while capital market are consist of trading in long term securities such as Shares, Debentures, Bonds etc. Money market has high liquidity; however capital market has low liquidity. Return of investment is low in money market and high in capital market. Money market fulfill short term credit needs of the business, while capital market fulfill long term credit needs of the business.