What is the difference between a capital market and a money market?

What is the difference between a capital market and a money market Introduction: The Financial Universe Greetings, financial enthusiasts! As we navigate the intricate realm of finance, it's vital to grasp the nuances of various market segments. Today, we'll focus on the divergence between capital markets and money markets. While both serve as critical pillars, they differ significantly in terms of scope, participants, and instruments. Capital Market: The Long-Term Arena The capital market is the domain of long-term investments. It's the go-to platform for entities seeking funds for significant ventures. Here, corporations issue stocks and bonds to raise capital, which can be utilized for expansion, research, or acquisitions. Institutional investors, such as pension funds and insurance companies, are the primary players in this market. The instruments traded here have maturities of over a year, and the returns are often higher, albeit with associated risks. Money Market: The Short-Term Landscape Contrastingly, the money market is all about short-term liquidity. It's where participants engage in transactions involving low-risk, highly liquid instruments.