Q. Consider the following statements regarding financial market:
1.The short-term financial market is known as the money market.
2.The long-term financial market is known as the capital market.
Which of the statements given above is/are correct?

[A] 1 only

[B] 2 only

[C] Both 1 and 2

[D] Neither 1 nor 2

Answer: C
Notes:

Explanation: Financial markets in every economy are having two separate segments today, one catering to the requirements of short-term funds and the other to the requirements of long-term funds.

  • The short-term financial market is known as the money market, while the long-term financial market is known as the capital market.
  • The money market fulfils the requirements of funds for the period up-to 364 days (i.e., short term) while the capital market does the same for the period above 364 days (i.e., long term).

Source: TMH Ramesh Singh