Q3 of 23 Page 145

Answer the following questions, each in about eight to ten sentences.

What do you mean by Money market and how is it different from the capital market?


Money market is used to arrange or trade the finance for a short period of time which varies from 1 day, 1 week, 3 to 6 months or 1-year maximum from commercial banks, financial banks and chit funds etc. The interest rate is high in the money market. The money market is obtained based on trade bills, bonds and treasury bills.

Whereas, the Capital market is a way to obtain finance for long term needs by promising the stocks, debentures, bonds etc. The interest rate is low in the capital market. The financial institutions, financial corporation, mutual funds etc. have made the capital markets a well-organized one than compared to the money market.


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3 D

Answer the following questions, each in about eight to ten sentences.

What is the part played by Industrial Finance Corporation (IFC) and State Finance Corporations (SFS) in financing business?


 3

Answer the following questions, each in about eight to ten sentences.

What are long term public deposits, and what are their advantages to the public?


 3

Answer the following questions, each in about eight to ten sentences.

Explain in brief the part played by the stock exchange in Financial matters of business.


 4 A

Activity :

Visit a Bank near your place and collect information from the manager, to which business organizations, the bank advances short terms credit and long term credit.