Money Market Quiz

What is the primary nature of the money market?

• Long-term investments

• Financial market for short-term, highly liquid financial assets

• Stock market trading

• Real estate transactions

Which of the following is NOT a participant in the money market?

• Retail Investors

• Commercial Banks

• Central Government

• Private Sector Companies

What is a Banker's Acceptance?

• A negotiable instrument drawn on and accepted by a bank

• A type of long-term loan

• A form of equity investment

• A type of government bond

What is the typical maturity period for Treasury Bills?

• One month

• Three months, six months, and one year

• Five years

• Two years

Which of the following instruments is considered a low-risk debt instrument?

• Certificates of Deposit

• Commercial Paper

• Eurodollars

• Bankers' Acceptances

What is the average maturity of Commercial Paper?

• One year

• Six months

• Between one and two months

• Less than one month

What are Eurodollars?

• Government bonds issued in Europe

• Deposits in U.S. dollars in banks outside the U.S.

• A type of European currency

• Foreign exchange reserves

What is a Repurchase Agreement (Repo)?

• A type of savings account

• A government bond

• A type of stock investment

• A legal contract for the sale and repurchase of securities

Why is money market risk considered relatively low?

• Instruments are highly volatile

• Instruments are traded internationally

• Instruments are long-term

• Instruments are short-term

What is the main purpose of issuing Commercial Paper?

• To purchase government bonds

• To finance working capital

• To invest in real estate

• To finance long-term projects