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Differentiate… (Class 12 Business Studies 2026, Q24a)

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Business StudiesCBSE Class 12 · Board exam 2026, set 66/5/1 · 3 marks · Short answer

CBSE Class 12 Business Studies 2026: question 24(a)

Set in the CBSE Class 12 board exam of 2026, paper 66/5/1, section B, question 24(a), for 3 marks. Try it first; the hints and our step-by-step solution are below.

Q24(a) · 3 marks · Short answerFinancial Markets

Differentiate between ‘Capital Market’ and ‘Money Market’ on the basis of the following :
(i) Investment outlay
(ii) Liquidity
(iii) Safety

Source: official question paper from cbse.gov.in (PDF). See it in the full 2026 board paper, set 66/5/1.

Hints

Open one hint at a time and try again before the next.

Hint 1

Money market instruments are short-term and large.

Hint 2

Shorter maturity means more liquidity and safety.

Step-by-step solution

Each step shows the marks it earns, as an examiner would award them. Checked by an independent re-solve from the question paper.

  1. (i) Investment outlay: Capital market: units of securities are of low value, so a huge outlay is not needed. Money market: instruments are expensive and need huge sums.

    1 mark

  2. (ii) Liquidity: Capital market securities are less liquid; money market instruments are highly liquid as there is a formal arrangement for it.

    1 mark

  3. (iii) Safety: Capital market instruments are riskier in returns and principal; money market instruments are much safer with minimum risk of default.

    1 mark

Answer: Capital market: low outlay, less liquid, riskier. Money market: huge outlay, more liquid, safer.

Where the marks are

  • Each basis, 1 mark

Revise the chapter

Practise this chapterBoard-style questions from Financial Markets, one at a time, marked against the answer key and marking points.Back to the full paper2026 board paper, set 66/5/1: every question, by section.

The question is transcribed from the official paper; figures are described in words. The solution, hints and chapter tag are ours. Spotted an error? Write tosupport@questionbuddy.in.