Difference between Money and Capital Market 

Basis Money Market Capital Market Maturity of instruments Less than one year More than one year to 25 years Risks Less High Instruments Treasury bills, bills of exchange, promissory notes Bonds, debentures stock, etc Finance Short Long Relation with central bank Direct Indirect

Concept of capital market 

The market which deals with medium and long term financial instruments is called capital market. There are long term security transactions in capital market for more than one year to 25. Bonds, shares, debentures, etc are long term securities. There are also transactions of non-security component for example long term loan provided by banks. There […]

Concept of money market 

Money market refers to the transaction of short term/run credit instrument. These instruments are highly liquid, easily marketable with little chance of loss. The maturity period of these instruments are less than one year. The examples of instruments are treasury bill, bill of exchange, promissory note. The main function of money market is to make […]

Functions of commercial banks 

Functions of commercial banks:   Commercial banks act as intermediates between those, who have surplus money and those who need it. To receive deposits and advance loans are the main functions of all commercial banks. In brief they borrow to lend. They work to earn profit. The main functions of the commercial banks are discussed […]

Role of Central Bank with special reference to the Nepal Rastra Bank 

Role of Central Bank with special reference to the Nepal Rastra Bank:   Central bank is the supreme monetary institution, which is remained at the apex body of the monetary and banking structure of a country. It is the leader of money market and it controls, regulates and supervises the activities of the banks and […]

Role of Bank 

Role of Bank Capital formation: Capital formation is one of the essential parts of economic development. There is the lack of capital formation in most of the developing countries like Nepal.  So, bank collects ideal money from the people and invest that shaving on the productive sector. That causes capital formation as well as development […]

Types of Bank 

Types of Bank:  Central bank: Central bank is the monetary authority or nation. It is the controller, regulator, monitor and supervisor of all kinds of financial institutions. CB issues notes. It is the bank of the bank, bank of the government, adviser of the government agent of the government. Commercial Bank: Commercial bank is established […]

Weighted price index 

Weighted price index The price index constructed by giving different weights to different commodities is called weighted price index.  Weights are given on the basis of regularity in consumption and the amount spent and the number of consumers.  The commodities consumed by all or majority of consumers spending large amount of income is given more […]

Simple price index number 

Simple price index number Rice index number constructed giving equal weights to all commodities is called simple price index number, in this case, all commodities are given equal importance. The average price is calculated simply dividing the sum of prices by number of commodities. Mathematically, simple average price = sum of prices / no. of […]

Procedure of construction of price index 

Procedure of construction of price index Selection of base year: To construct price index number one of the past year is to be taken as base year but the base year should be normal year. The year without natural calamities, civic war, external war etc is called normal year. The base year should not be […]