Question
Q75. Consider the following markets:
- Government Bond Market
- Cal] Money Market
- Treasury Bill Market
- Stock Market
How many of the above are included in capital markets?
- Only one
- Only two
- Only three
- AIl four
Answer: 2
Detailed Explanation
There are two types of Markets:
Long Term (called Capital – Market for long-term funds (more than 1 year))
Short Term (called Money – Market for short-term funds (less than 1 year))
Now, let’s look at the options:
Government Bond Market – Capital Market
• Long-term instruments (dated securities) → capital market
Call Money Market – NOT Capital Market
• Very short-term (overnight) lending between banks → money market
Treasury Bill Market – NOT Capital Market
• Short-term (less than 1 year) government borrowing → money market
Stock Market – Capital Market
• Equity shares, long-term securities → capital market