ECONOMICS
FINANCIAL MARKETS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Which of the following NOT the main motive of a bank to participate in money market
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To square the position
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To manage liquidity
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To create new position for profit
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To manage their market risk
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Explanation:
Detailed explanation-1: -Mutual Funds is not a part of Money Market.
Detailed explanation-2: -Equity shares are long-term instruments and hence, cannot be a money market instrument.
Detailed explanation-3: -Below are the main objectives of the money market: Providing borrowers such as individual investors, government, etc. with short-term funds at a reasonable price. Lenders will also have the advantage of liquidity as the securities in the money market are short-term.
Detailed explanation-4: -The main purpose of commercial banks is to provide financial services to the general public and also provide loan facilities to the business which helps in ensuring economic stability and growth of the economy.
There is 1 question to complete.