ntruments traded in Money Market generally have a maturity of upto___________Answer choicesSelect only one optionREVISIT1 year1-2 year2-5 yearmore than 5 years
Question
Solution
Answer to the Question:
In the Money Market, instruments typically have a maturity of up to 1 year. Money Market instruments include Treasury bills, commercial paper, and certificates of deposit, which are all designed for short-term borrowing and lending.
Explanation:
The Money Market is characterized by the trading of short-term financial instruments. The primary reason for this short maturity is to provide liquidity for businesses and governments needing to manage their cash flow in the short term. Instruments with longer maturities belong to the Capital Market rather than the Money Market. Therefore, the correct answer is 1 year.
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