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Financial Markets
Question
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Why do money market instrument are more liquid as compare to capital market instrument?

Answer

Money market instruments are more liquid as compare to capital market instruments due to the presence of Discount Finance House of India (DFHI) in the money market. DFHI provides a ready market for money market instruments and that is why, these instruments enjoy higher liquidity.

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Some More Questions From Financial Markets Chapter

What is meant by ‘Financial Assets’?

Explain the various money market instruments.

What is meant by ‘Money Market’? List any four money market instruments.

‘‘Money Market is essential market for short term funds.’’ Discuss.

What is meant by ‘Treasury Bill’ and ‘Trade Bill’?

What is meant by ‘Commercial Paper’ and ‘Certificate of Deposit’?

What is Money Market?

Give two examples of Floatation Costs.

Name any two buyers of Commercial Papers.

What is meant by ‘Near Money’?