In money market, large firms also ..... when they have surplus cash (e.g:invest in commercial paper) and ..... when they are short of money.

FINANCIAL MARKETS

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Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]

In money market, large firms also ____ when they have surplus cash (e.g:invest in commercial paper) and ____ when they are short of money.

A	borrow; lend
B	lend; borrow
C	sell securities; buy securities
D	issue securities; call back securities

Explanation:

Detailed explanation-1: -"Money market is essentially market for short term funds".

Detailed explanation-2: -The money market is an organized exchange market where participants can lend and borrow short-term, high-quality debt securities with average maturities of one year or less. It enables governments, banks, and other large institutions to sell short-term securities to fund their short-term cash flow needs.

Detailed explanation-3: -Money market funds invest in U.S. Treasuries, municipal bonds, corporate commercial paper, and other short-term securities, which are liquid and low risk.

Detailed explanation-4: -Money market consists of various financial institutions and dealers, who seek to borrow or loan securities. It is the best source to invest in liquid assets. The money market is an unregulated and informal market and not structured like the capital markets, where things are organised in a formal way.

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ECONOMICS (CBSE/UGC NET)

ECONOMICS

FINANCIAL MARKETS