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Money market deals in _____________________
  • a)
    Long term Securities
  • b)
    Medium term securities
  • c)
    Short term Securities
  • d)
    None of these
Correct answer is option 'C'. Can you explain this answer?
Most Upvoted Answer
Money market deals in _____________________a)Long term Securitiesb)Med...
Money market deals in short term securities

Money market refers to the market where short-term borrowing and lending of funds takes place. It deals with various short-term financial instruments that have a maturity period of one year or less. These instruments are highly liquid and have low risk.

Key points about money market:


  • Money market deals in short-term securities, which include:


    • Treasury bills: Short-term debt obligations issued by the government

    • Commercial paper: Unsecured promissory notes issued by corporations to raise short-term funds

    • Certificates of deposit: Time deposits issued by banks with a fixed maturity date

    • Repurchase agreements: Short-term loans collateralized by government securities

    • Banker's acceptances: Time drafts drawn on and accepted by banks, used to finance international trade

    • Short-term municipal notes: Short-term debt securities issued by municipalities


  • Money market instruments provide short-term funding options for governments, financial institutions, and corporations.

  • Investors in money market instruments usually seek safety of principal and stability of returns.

  • Money market transactions are typically conducted in large denominations and by institutional investors.

  • Money market instruments are traded in the secondary market, allowing investors to buy and sell them before maturity.

  • Money market investments are considered relatively low-risk compared to other types of investments.

  • Money market deals play a crucial role in the overall functioning of the financial system by providing liquidity and facilitating short-term borrowing and lending.


Therefore, the correct answer is option C: Short-term securities.
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Money market deals in _____________________a)Long term Securitiesb)Medium term securitiesc)Short term Securitiesd)None of theseCorrect answer is option 'C'. Can you explain this answer?
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