Q.(a) Differentiate between the Money Market and Capital Market. (any 5)
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Start your 14-day free trial to unlock the full solution →(a) The money market is for short-term funds and working capital (T-bills, commercial paper, CDs; RBI and banks); the capital market is for long-term funds and fixed capital (shares, debentures, bonds; stock exchanges, SEBI). (b) Consumers must be quality conscious, wary of false ads, insist on bills/warranty, buy standardised goods, read labels and assert their rights.
This is a 5-mark Part-IV question with an internal OR choice; both alternatives are answered.
(a) Money Market vs Capital Market (any five differences, from the Money Market chapter of the Tamil Nadu HSC Class-12 Commerce syllabus):
| Basis | Money Market | Capital Market |
|---|---|---|
| Duration | Deals in short-term funds (up to one year) | Deals in medium- and long-term funds (over one year) |
| Instruments | Treasury bills, commercial paper, certificates of deposit, call money | Shares, debentures, bonds, government securities |
| Institutions | RBI, commercial banks, DFHI, finance companies | Stock exchanges, SEBI, merchant bankers |
| Purpose | Meets working-capital (short-term) needs | Meets fixed-capital (long-term) needs |
| Risk | Low risk | Comparatively higher risk |
| Return / liquidity | Lower return, high liquidity | Higher return, comparatively lower liquidity |
(b) Responsibilities of consumers (any five, from the Rights, Duties and Responsibilities of Consumers chapter):
- Be quality conscious: consumers should not compromise on quality and should refuse sub-standard goods.
- Beware of misleading advertisements: they should not be swayed by exaggerated or false advertisements.
- Obtain bill and warranty: they must insist on a cash bill/receipt and the warranty or guarantee card for the goods bought. …
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