Based on following case study, answer the question.

Financial Market are classified on the basis of the maturity of financial Instruments traded in them. Instruments with a maturity of less than one year are traded in money market while instruments with longer maturity are traded in Capital market. Instruments with a maturity of short term/ period upto one year are close substitutes for money. While long term funds market, direct savings of the community into their most productive use leading to growth and development of the economy.

On the basis of the maturity of Financial Instruments, Financial Markets are classified into two categories such as:

Money Market and Capital Market

The correct answer is option (2) : Money Market and Capital Market

Financial markets are classified on the basis of the maturity of financial instruments traded in them. Instruments with a maturity of less than one year are traded in the money market. Instruments with longer maturity are traded in the capital market.