defferentiate between money markets and capital markets.?

Question

tell the difference between the both, what make them diffrence from eath other.

Answer 1

A Money Market is a subset of the capital markets.

Whereas, in capital markets, it has links up all the buyers and sellers of a financial security, whether it may be in equity, debt, commodities, or even derivatives. The capital markets are able to determine at what price the buyers and sellers of a certain financial instrument will agree on.

In the case of money markets, this involves a lot of financial institutions buying and selling fixed-rate debt. The government is heavily involved in this trading system since it is the biggest issuer of debt. It is driven primarily by the Fed interest rates. Most of the instruments traded in the money market are risk-free, whereas in the capital markets, there are a lot more risk involved.