Question

The following is (are) advantage(s) of capital market instruments when compared to money market instruments: They...

The following is (are) advantage(s) of capital market instruments when compared to money market instruments:

  1. They are readily marketable.
  2. Higher resale value when interest rates fall.
  3. Higher expected rate of return.
  4. (b) and (c).
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Answer #1

Money Market instruments are for short term instruments.

Capital Market intruments are long term instruments.

As Money Market instruments are short term instruments, they are more liquid (that is marketable)

Capital market instruments are of longer term, therefore have higher resale value when interest rates fall.

As Capital market intruments are of higher term, they are more riskier and thus have higher expected rate of return.

Therefore option (d) is correct.

Thumbs up please if satisfied. Thanks :)

Comment if further doubts

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