Topic4- FM/ set 1

Hi! How are you today?

Welcome to topic 4- The Debt Markets!

Are you ready?

• Yes

• No

The money market is the market by which participants can buy and sell, borrow and lend money.  It is generally defined as ________ in nature which means for instruments with maturities ____than one year

Which of the following is NOT about the money market

• Not a physical market

• For short term financial instruments

• There is a physical market

• To transfer the fund

What motivates market participants to engage in transactions within the Money Market?

• To achieve long-term capital growth

• To manage short-term liquidity needs.

• To invest in high-risk, high-reward securities.

• To diversify their portfolios with foreign currencies.

What role do financial institutions, such as banks, play in the debt market?

• Issuing government securities

• Assessing credit ratings

• Facilitating trading and providing liquidity

• Setting interest rates

Money Market operations comprise:

• Placing of deposits

• Short-term borrowing

•   Sale and purchase of money market securities

• All of the above

How do intermediaries in Money Market take profit, in your opinion?

How do commercial banks participate in the Money Market?

• Issuing commercial bills

• Providing long-term loans to corporations

• Offering hire purchase or lease finance

• Accepting deposits and making loans to individuals and companies

How do corporations participate in the Money Market?

• Providing long-term loans to other corporations

• Issuing commercial bills and promissory notes

• Accepting fixed deposits and short-term loans

• Managing overdraft facilities for commercial banks