Q. With reference to the capital and money markets, which of the following statements is/are correct?
1. The money market fulfils the requirements of funds for the period up to 364 days.
2. The capital market fulfils the requirements of funds for the period above 364 days.
Select the correct answer using the codes given below:

[A] 1 only

[B] 2 only

[C] Both 1 and 2

[D] Neither 1 nor 2

Answer: C
Notes:
  • 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 upto 364 days (i.e., short term) while the capital market does the same for the period above 364 days (i.e., long term).

Source: Source