The main characteristics or features of capital market can be described as follows:
1. Long Maturity Period
Capital market involves in the trading of financial instruments having long maturity period (generally more than one year).
2. Credit Instruments
Shares, debentures, government securities etc. are the main credit instruments traded in the capital market.
3. Purpose/Objective
Capital market helps to fulfill the long-term financial requirements of the firm such as fixed assets, machinery, equipment etc.
4. Risk Involved
This market involves high level of risk while comparing to money market because of long maturity period.
5. Operating Institutions
Banks, stock exchange and investment companies operate capital market.
Also Read:
Also Read:
6. Regulation
It is less regulated than money market.
7. Safety
It is less safe than money market because of long term maturity period, high level of risk and less regulations.
