Inter relation between money market and capital market?
Relationship between Money Market and Capital Market:
a) Capital market is a market for financial assets which have a long or indefinite maturity and money market is the mechanism whereby funds are obtained for short periods of time (from one day to one year).
b) Two markets are inter-related. They will buy treasury bills at relative.
c) In Money Market, short-term funds are used whereas the Capital Market deals in long term fund required.
d) Capital Market is not as sensitive to change in demand and supply as are the money market components.
e) Change of interest rate in both market affect each other.
f) Money markets facilitate the sale of short-term securities, while capital markets facilitate the sale/buy of long term securities.
Prepared by
Md. Al-mamun,
MBA, 26th Batch, ID: 2023
Prime University
Bangladesh
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