Which of the following is true about Money marketAnswer choicesSelect only one optionREVISITLow riskHigh RiskNo RiskVery High risk

Analyzing Money Market Risks

1. Understanding Money Markets: Money market instruments, such as Treasury bills, certificates of deposit, and commercial paper, are generally considered low-risk investments. They are typically short-term and backed by stable entities.

2. Evaluating Risk Levels:

   • Low Risk: Money markets are designed to provide safety and liquidity, making them suitable for conservative investors.
   • High Risk: This does not apply as money markets do not involve high-risk investments.
   • No Risk: While they are low risk, they are not risk-free as there is always some form of risk involved.
   • Very High Risk: Money markets are generally not classified in this category.

Conclusion:

The correct answer is Low Risk. Money markets are primarily characterized by their stability and short-term nature, offering lower risk compared to other investment types.