CMA Intermediate · Financial Management and Business Data Analytics · Money Market
Which of the following best describes the money market in a financial system?
The money market is the market for short-term funds where instruments mature in up to one year. It provides liquidity and near-money assets. Long-term securities and equity shares trade in the capital market, and currency exchange happens in the forex market.
- AA market for short-term funds with instruments maturing up to one yearCorrect
- BA market for long-term securities with maturity above five years
- CA market exclusively for trading equity shares of listed companies
- DA market where only foreign currency is exchanged
Explanation
The money market deals in short-term financial assets, generally with maturity up to one year, providing liquidity to participants. Long-term securities belong to the capital market, and equity trading is a capital market activity. Foreign currency exchange is the forex market.
Did you get it right without looking?
One question tells you little. A timed set on Money Market shows your real accuracy, how long you take and where you lose marks.
More Money Market questions
- Which feature distinguishes money market instruments from capital market instruments?
- A company issues commercial paper of face value Rs 5,00,000 for 90 days at a discount rate such that it receives Rs 4,85,000 on issue. Takin…
- Which feature best distinguishes a money market mutual fund (liquid fund) from an equity mutual fund in India?
- A bank discounts a 90-day commercial bill of ₹5,00,000 drawn by Sharma Traders on Gupta Stores at a discount rate of 12% per annum (360-day …
- A 91-day Treasury Bill of face value Rs 100 is issued at Rs 98.50. Using a 365-day year, the annualised yield (on the investment basis, simp…
- Within the organised structure of the Indian money market, the call/notice money market is best described as a market for: