22.common feature shared by both capital market and money market? A. Short-term instruments B. Focus on long-term financing C. Involvement of only government securities D. Limited liquidity
Question
22.common feature shared by both capital market and money market? A. Short-term instruments B. Focus on long-term financing C. Involvement of only government securities D. Limited liquidity
Solution
The common feature shared by both capital market and money market is B. Focus on long-term financing. Both markets are platforms where buyers and sellers interact for the purpose of trade. They both play a crucial role in improving the efficiency of the economy by facilitating the flow of funds from those who have surplus funds to those who are in need of funds. They both focus on long-term financing, although the instruments and participants may differ. The capital market typically deals with long term securities like stocks and bonds, while the money market deals with short term debt instruments like treasury bills and commercial paper.
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