Money and Capital market

3. Purpose of Investment:

*Money Market: Primarily used for short-term liquidity management, temporary surplus funds, and overnight lending. 

*Capital Market: Used for long-term investments, financing infrastructure projects, and building companies.

 

4. Risk and Return: 

 *Money Market: Generally considered less risky than the capital market due to the shorter maturities and lower volatility of instruments. Returns tend to be lower as well.

 *Capital Market:  Offers higher potential returns but also carries greater risk due to the longer investment horizon and potential for price fluctuations.

 

*Economic indicators impacting money and capital market:

Economic indicators play a crucial role in shaping the behavior of money and capital markets, influencing investor sentiment, interest rates, and overall market performance. Here are some key economic indicators and their impact: