Question
What is meant by ‘Money Market’? List any four money market instruments.
Solution
Meaning: Money market is that market where transactions are made in short-term securities which are in the form of near money. It brings together the lenders who have surplus short-term investible funds and the borrowers who are in need of funds for the short-term. In this market funds can be borrowed for a short-period varying from a day, a week, a month, or 3 to 12 months and against a variety of instruments.
Money Market Instruments:
(i) Treasury Bill
(ii) Commercial Paper
(iii) Call Money or Call Loans
(iv) Certificate of Deposits
