ECONOMICS
FOREIGN CURRENCY MARKETS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Market for short term mobilization of funds among market participant
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An instrument has maturity date and issuer will have to refund the principal to investor
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Market that did not provide facility for participants in financial system
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None of the above
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Detailed explanation-1: -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-2: -T-bills are issued by the Government of India to raise money for a short-term of up to 365 days. Treasury bills are considered one of the safest instruments as the government backs these. The rate of return, also known as the risk-free rate, is low on T-bills as compared to all other instruments.
Detailed explanation-3: -For the short term Money markets include markets for such instruments as bank accounts, including term certificates of deposit; interbank loans (loans between banks); money market mutual funds; commercial paper; Treasury bills; and securities lending and repurchase agreements (repos).
Detailed explanation-4: -A type of fixed income mutual fund that invests only in highly liquid, short-term debt. These funds offer high liquidity with a very low level of risk.
Detailed explanation-5: -Participants. The money market consists of financial institutions and dealers in money or credit who wish to either borrow or lend. Participants borrow and lend for short periods, typically up to twelve months. Money market trades in short-term financial instruments commonly called “paper".