ECONOMICS (CBSE/UGC NET)

ECONOMICS

FINANCIAL MARKETS

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
The expected rate of return of the money market is ____
A
Very high
B
Less
C
Zero
D
None of the above
Explanation: 

Detailed explanation-1: -The money market yield will be lower than the yield on stocks and bonds because of the low risk.

Detailed explanation-2: -The expected return is the profit or loss that an investor anticipates on an investment that has known historical rates of return (RoR). It is calculated by multiplying potential outcomes by the chances of them occurring and then totaling these results.

Detailed explanation-3: -With all investments, you run the risk of losing money. Money market funds, however, are widely considered one of the safest, lowest-risk and least volatile investment options.

Detailed explanation-4: -Usually, there is a shortage of funds in the Indian Money Market due to various factors, such as low savings, inadequate banking facilities, lack of banking habits, the existence of a parallel economy, etc.

Detailed explanation-5: -It may be insured and secured. Unlike money invested in stocks and bonds or other investment vehicles, the funds in a money market account carry lower risk. It comes with familiar account benefits. It is usually easy to access. It could return superior interest rates. 14-Nov-2022

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