CA Foundation · Business Economics · Money Market
Which of the following statements about the money market is correct?
The money market is a collection of markets and institutions dealing in short-term, highly liquid financial assets that are close substitutes for money. It has no single physical location, its maturities are up to one year, and it does not raise permanent capital.
- AIt has a single centralised physical location where all transactions take place
- BIt consists of a group of markets and institutions dealing in short-term financial assets that are close substitutes for moneyCorrect
- CIts instruments have maturities of more than ten years
- DIts main purpose is to raise permanent capital for companies
Explanation
The money market is not one place but a collection of markets and institutions dealing in short-term, highly liquid claims that are near substitutes for money. Its maturities are up to a year, and permanent capital is raised in the capital 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 of the following actions by the RBI would normally reduce the money multiplier?
- Which of the following is NOT a characteristic of money market instruments?
- Which of the following money market instruments is issued by a scheduled commercial bank to raise funds from depositors and carries a fixed …
- Which of the following money market instruments is issued by a scheduled commercial bank to raise funds from depositors, is a negotiable ins…
- Which of the following changes would shift the money demand curve to the right at every interest rate, thereby raising the equilibrium inter…
- Meera Textiles needs short-term funds for 60 days and has a well-rated, unsecured promissory note it wants to sell to investors directly, wi…