"Money Market is essentially a Market for short term funds." Discuss.
Answers
SOLUTION :
Money market is essentially a market for short term funds :
(a) Money market is a market where the financial instruments convertible into cash within a period from one day to one year are dealt.
(b) The money market instruments are unsecured, negotiable, highly liquid and carry low risk.
(c)The main purpose of money market is to meet urgent requirements of cash and working capital.
(d) The instruments traded in such market may liquidated into cash even before the date of maturity with the help of Discounted Finance House of India (DFHI).
The above points will help it to make it clear that money market meant only for short term funds.
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Answer:
The money market is a market for short term funds which deals in monetary assets whose period of maturity is upto one year. These assets are close substitutes for money. It is a market where low risk, unsecured and short term debt instruments that are highly liquid are issued and actively traded everyday