Features of Money Market - Topic 2

Select the correct options(s).

A money market is a market for dealing in ____________financial assets.

• medium term

• long term

• short term

Answer explanation

Money market is divided into two parts, namely, organised money market and unorganised money market. The funds borrowed and lent in money market are for short term. Example: For one year or less than one year.

Select the correct options(s).

Commercial bill and commercial paper are traded in _________ market.

• money

• capital

• industrial securities

Answer explanation

Financial assets having high liquidity are traded in money market. The instruments like commercial paper, liquid and treasury bills etc. are traded in the money market.

Write a word or phrase or a term.

Market for securities having a maturity period of one or less than one year.

(a)  

Answer explanation

Money market is a market for dealing in short-term financial assets, having high liquidity with close substitutes for money. It is a market for securities having a maturity period of one year or less than one year.

Write a word or phrase or a term.

Participants in the money market.

(a)  

State whether true or false.

Money market operates through organised and unorganised money market.

• 
• 

State whether true or false.

Money market cannot work without the help of intermediaries.

• 
• 

Correct the underlined word.

Financial assets having low liquidity are traded in money market.

(a)  

Correct the underlined word.

The success of money market depends on eco-system.

(a)